Washington HB 1714: Enabling opportunities for risk pooling by small businesses for property and liability risks.

Bill Text

AN  ACT  Relating  to  enabling  opportunities  for  risk  pooling  by 1
small businesses for property and liability risks; and adding a new 2
chapter to Title 48 RCW.3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
NEW  SECTION.   Sec.  1.   This  chapter  is  intended  to  provide 5
authority for two or more small business entities to participate in a 6
joint  self-insurance  program  covering  property  or  liability  risks. 7
This  chapter  provides  small  business  entities  with  the  authority  to 8
jointly  self-insure  property  and  liability  risks,  jointly  purchase 9
insurance  or  reinsurance,  and  contract  for  risk  management,  claims, 
10
and administrative services with other small business entities. This 11
chapter must be liberally construed to grant small business entities 12
maximum flexibility in jointly self-insuring to the extent the self-13
insurance  programs  are  operated  in  a  safe  and  sound  manner.  This 14
chapter  is  intended  to  require  prior  approval  for  the  establishment 15
of  every  joint  self-insurance  program.  In  addition,  this  chapter  is 16
intended  to  require  every  joint  self-insurance  program  for  small 17
business entities established under this chapter to notify the state 18
of the existence of the program and to comply with the regulatory and 19
statutory  standards  governing  the  management  and  operation  of  the 20
programs as provided in this chapter. This chapter is not intended to 21
H-0897.1
HOUSE BILL 1714
State of Washington69th Legislature2025 Regular Session
By Representatives  Cortes,  Walen,  Parshley,  Callan,  Zahn,  Peterson, 
Shavers, Salahuddin, Street, Reed, Nance, Ormsby, and Hill
Read  first  time  01/29/25.   Referred  to  Committee  on  Consumer 
Protection & Business.
p. 1HB 1714

authorize  or  regulate  self-insurance  of  unemployment  compensation 1
under chapter 50.44  RCW  or  industrial  insurance  under chapter 51.14 2
RCW.3
NEW  SECTION.   Sec.  2.   The  definitions  in  this  section  apply 4
throughout   this   chapter   unless   the   context   clearly   requires 5
otherwise.6
(1)  "Program"  means  a  joint  self-insurance  program  authorized 7
under section 3 of this act.8
(2) "Property and liability risks" includes the risk of property 9
damage or loss sustained by a small business entity and the risk of 10
claims arising from the tortious or negligent conduct or any error or 11
omission  of  the  entity,  its  officers,  employees,  agents,  or 12
volunteers  as  a  result  of  a  claim  that  may  be  made  against  the 13
entity.14
(3)  "Self-insurance"  means  a  formal  program  of  advance  funding 15
and management of entity financial exposure to a risk of loss that is 16
not  transferred  through  the  purchase  of  an  insurance  policy  or 17
contract.18
(4)  "Small  business  entity"  means  a  corporation,  limited 19
liability    company,    limited    partnership,    limited    liability 20
partnership,  general  cooperative  association,  limited  cooperative 21
association,  sole  proprietorship,  or  another  type  of  for-profit 22
business entity, so long as the entity has no more than 20 employees 23
employed on average over the latest 24 calendar months, counting all 24
employees  regardless  of  the  hours  worked  or  temporary  status  of  an 25
employee, provided that if an entity has not been in business for 24 26
months, the average number of employees is used for each of the pay 27
periods during which it has been in business.28
(5) "State risk manager" means the risk manager of the office of 29
risk management within the department of enterprise services.30
NEW SECTION.  Sec. 3.  (1) A small business entity may join or 31
form a joint self-insurance program together with one or more other 32
small  business  entities,  and  may  jointly  purchase  insurance  or 33
reinsurance  with  one  or  more  other  small  business  entities  for 34
property  and  liability  risks  only  as  permitted  under  this  chapter. 35
Small business entities may contract for or hire personnel to provide 36
risk  management,  claims,  and  administrative  services  in  accordance 37
with this chapter.38
p. 2HB 1714

(2) The agreement to form a program may include the organization 1
of a separate legal or administrative entity with powers delegated to 2
the entity. The entity may include or form another entity.3
(3)  If  provided  for  in  the  organizational  documents,  a  program 4
may, in conformance with this chapter:5
(a)  Contract  or  otherwise  provide  for  risk  management  and  loss 6
control services;7
(b)  Contract  or  otherwise  provide  legal  counsel  for  the  defense 8
of claims and other legal services;9
(c) Consult with the commissioner and the state risk manager;10
(d) Jointly purchase insurance and reinsurance coverage in a form 11
and amount as provided for in the organizational documents;12
(e)  Obligate  the  program's  participants  to  pl