If you're a contractor in Washington State — whether you're a plumber, electrician, roofer, landscaper, or general contractor — you've probably heard that you need general liability insurance. But you may have also heard about a Business Owner's Policy (BOP). What's the difference, and which one do you actually need?

Here's a straightforward breakdown.

What Is General Liability Insurance?

General liability (GL) insurance covers your business against claims involving:

• Bodily injury to third parties — a client trips over your equipment and breaks their wrist
• Property damage you cause — you accidentally crack a customer's tile floor while installing cabinets
• Personal and advertising injury — libel, slander, or copyright infringement claims

For contractors, general liability is the foundation of your insurance program. It's what most clients and general contractors require before they'll let you on a job site. It's also required to obtain or renew your contractor's license in Washington State.

What GL does NOT cover:

• Your own tools and equipment
• Your business property (office, inventory, supplies)
• Your employees' injuries (that's workers' comp)
• Your own vehicles (that's commercial auto)
• Errors in your professional advice (that's professional liability/E&O)

What Is a Business Owner's Policy (BOP)?

A BOP bundles two coverages into one policy:

1. General liability (same as above)
2. Commercial property insurance — covers your business property, including your office, equipment, inventory, and sometimes tools

BOPs are designed for small to mid-sized businesses and are typically priced as a package deal — often cheaper than buying the two coverages separately.

What a BOP typically covers:

• Third-party bodily injury and property damage (GL component)
• Your business building or leased space
• Business personal property (furniture, computers, equipment)
• Business interruption — lost income if a covered event forces you to temporarily close

What a BOP does NOT cover:

• Professional liability / errors and omissions
• Workers' compensation
• Commercial auto
• Flood or earthquake (usually requires separate policies)

Which One Do Washington Contractors Need?

The answer depends on your business structure and what you own.

You probably need General Liability only if:

• You work out of your home or truck (no commercial office or storefront)
• You don't have significant business property to protect
• You're a sole proprietor or very small operation
• Your clients or licensing board only require GL

This is the most common situation for independent tradespeople — electricians, plumbers, painters, landscapers, and similar trades who work on-site at client locations.

You probably need a BOP if:

• You have a physical office, shop, or warehouse
• You carry significant inventory or equipment stored at a fixed location
• You want business interruption coverage in case you can't work due to a covered loss
• You want to bundle coverages for simplicity and potential cost savings

A roofing company with a warehouse full of materials, or a landscaping company with a yard full of equipment, would benefit from the property coverage a BOP provides.

Washington Contractor Licensing Requirements

Washington State requires licensed contractors to carry general liability insurance. The minimum amounts vary by license type:

• General contractor (commercial): $100,000 per occurrence
• General contractor (residential): $100,000 per occurrence
• Specialty contractor: $100,000 per occurrence

You'll also need a surety bond — separate from insurance — to obtain your contractor's license. The bond amount varies by license type.

Note: a BOP satisfies the GL requirement, since it includes general liability as a component.

Do You Need Both GL and a BOP?

No — a BOP includes general liability. You don't buy both; you choose one or the other based on whether you need the property coverage component.

If you have a BOP and later decide you don't need the property coverage, you can switch to a standalone GL policy. If you have a standalone GL policy and your business grows to the point where you have significant property to protect, upgrading to a BOP makes sense.

What About Tools and Equipment?

This is a common gap for contractors. Standard GL and most BOPs do not cover your tools and equipment while they're on a job site or in your truck. For that, you need a separate inland marine or tools and equipment policy (sometimes called a contractor's equipment floater).

If your tools were stolen from your truck or damaged on a job site, GL won't cover it and a standard BOP may not either. Ask your agent specifically about tools and equipment coverage.

How Much Does It Cost?

For Washington contractors, rough annual premium ranges:

Coverage	Annual Cost
General liability ($1M/$2M)	$500 – $2,500/year
BOP (GL + property)	$800 – $3,500/year
Tools & equipment floater	$200 – $800/year

Rates vary significantly based on your trade, annual revenue, number of employees, claims history, and coverage limits. Higher-risk trades (roofing, demolition, excavation) pay more than lower-risk trades (painting, landscaping).

Get the Right Coverage for Your Trade

At Universal Insurance Services, we work with contractors across Washington State — from sole proprietors to multi-crew operations. We'll help you figure out exactly what coverage you need, what your licensing requires, and how to get the best rate across multiple carriers.

Call 1-888-874-0208 or text (509) 852-3047. We'll get you covered and keep you compliant.