Boating liability insurance in Washington state is not mandatory, but it's a good idea if you want to protect yourself and your passengers. You can purchase boat insurance for a fairly reasonable price. Coverage protects your boat from physical damage as well as your passengers if they're injured. It also protects your boating equipment.
Check with the insurance company that covers your home and auto to see if it'll cover your boat, too. You could get a discount for having multiple policies with them. If you're not sure what type of coverage you need, just ask your agent. He or she can help make sure you're properly insured. Some small boats, like rowboats or dinghies may be covered under your homeowner policy - check your policy to be sure.
Here's more information about boating regulations in Washington state.