A plumbing business can be fraught with mistakes: Everything from damaging a client’s property to improper installations to employees who burn themselves on a hot water heater.
Without the right type of plumbing insurance, you might get hit hard with disastrous bills that could sink your business.
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What Is Plumbing Insurance?
Plumbing insurance is a small business insurance policy that contains several types of coverage to address the specific risks of the plumbing industry. A good plumbing insurance policy can pay for problems like lawsuits, stolen or damaged tools, lost income, and workplace injuries and illnesses.
For example, suppose you accidentally damage a customer’s wall while installing a bathtub. The general liability component of your plumbing insurance will cover the repair costs.
Who Needs Plumbing Insurance?
Plumbing insurance can cover businesses that perform tasks such as:
- Drainage system installers
- Piping and plumbing contractors
- Plumbing contractors
- Septic system construction workers
- Sewer hookup contractors
- Sump pump installation and servicing contractors
- Water pump installation and servicing contractors
- Water system balancing and testing contractors
What Does Plumbing Insurance Cover?
A solid plumbing insurance policy combines various types of small business insurance, all designed to cover your business from an array of risks. This coverage spans everything from legal conflicts to business assets.
You can start with a business owners policy (BOP). A BOP combines three important coverage types and it’s typically cheaper than buying each coverage separately. Here’s what you’ll find in a BOP:
General Liability Insurance
General liability insurance serves as the cornerstone of a plumbing insurance policy. It pays for accidental property damage and bodily injuries to others, not including your employees. For instance, if your sewer hookup inadvertently causes a massive leak that floods your customer’s yard, your policy’s general liability insurance will pay for repair costs.
Commercial Property Insurance
Commercial property insurance covers your business location and equipment if they are stolen, destroyed or damaged due to a problem covered by your policy, like a tornado or fire. It covers both owned and leased equipment, such as office furnishings, plumbing tools, inventory, supplies, computers, business documents and records.
Business Income Insurance
If you have to temporarily shut down your plumbing business due to a problem covered by your policy (like a fire), business income insurance replaces your lost income. This coverage is also known as business interruption insurance and covers problems like wind damage, theft, money lost due to damaged merchandise and the cost to temporarily move to a new location.
Other Small Business Insurance Types
Think of plumbing insurance as a house, with a BOP policy as its foundation. Once you have the foundation in place, you can build upon it with extra coverage based on your business needs. Here are some other small business insurance types to consider.
Commercial auto insurance
If you drive a vehicle for your plumbing business, such as transporting tools to a customer’s home, you’ll need commercial auto insurance. Your personal car insurance policy won’t cover work-related accidents.
Here are the common coverage types you’ll find in a commercial auto insurance policy.
- Liability insurance pays for injuries and property damage you or your employees accidentally cause to others. It also covers legal fees if you’re sued because of an accident.
- Collision insurance pays to replace or repair your work vehicle if you or your employees get into a car accident.
- Comprehensive insurance pays to repair or replace your work vehicle for damage caused by problems such as fire, floods, falling objects, theft storms or vandalism.
- Uninsured or underinsured motorist insurance pays for you and your passengers medical expenses if a driver without insurance crashes or doesn’t have enough insurance crashes into you.
- Personal injury protection (PIP) insurance and medical payments covers you and your passengers medical bills and other types of expenses no matter who is at fault for the car accident.
Equipment Breakdown Insurance
Equipment breakdown insurance is a valuable coverage if your plumbing business depends on certain types of machinery and tools. It covers repairs or replacements when this equipment unexpectedly breaks down. This coverage does not extend to regular wear and tear.
Errors and Omissions Insurance
Errors and omissions (E&O) insurance covers claims of professional mistakes, even if the claim has no merit. For example, if a client claims your plumbing work was poor workmanship that caused water damage, E&O covers your legal costs.
Errors and omissions insurance is also called professional liability insurance.
Hired and Non-Owned Auto Insurance
If you or your employees use a rented or personally owned vehicle for your plumbing business, this coverage pays for injuries and property damage accidentally caused to others. For example, if your employee is driving a rented van and backs into a customer’s fence, this coverage would pay to repair the fence.
Inland Marine Insurance
Inland marine insurance covers the tools and mobile machinery for your plumbing business while in transit to a job site. You may be able to add an installation floater endorsement to cover your equipment, machinery and materials while awaiting installation.
Surety Bonds
A surety bond covers the cost of claims about incomplete or poor workmanship. It also covers fraud and theft. Your plumbing business may be required to get a surety bond to get a plumber’s license.
Workers Compensation Insurance
Workers compensation insurance pays for your employees’ medical bills, lost income and other expenses if they get hurt or sick while performing job-related tasks. Workers compensation insurance is required in most states, even if you only have a single employee.
What’s Not Covered by Plumbing Insurance?
A plumbing insurance policy doesn’t cover many types of problems. Common exclusions include:
- Earthquakes
- Floods
- Government seizures
- Infectious diseases
- Intentional and fraudulent acts
- Radioactive fallouts
- War
- Wrongful termination (unless you have employment practices liability insurance)
Examples of Plumbing Insurance Claims
Here’s a breakdown of a couple of claim scenarios and the corresponding type of plumbing insurance coverage:
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How Much Does Plumbing Insurance Cost?
The average cost of plumbing insurance is $166 per month for a business owners policy, according to Insureon. Your plumbing insurance costs will depend on factors such as:
- Coverage type and policy limits
- Business location
- Number of employees
- Annual revenue
- Claims history
Example of the Cost of Plumbing Insurance
A plumbing insurance policy combines several key coverage types to cover a wide range of problems, like lawsuits, injuries and car accidents. Here’s a look at the annual cost for some of these coverage types.
Ways to Save on Plumbing Insurance
Here are a few strategies that can help you reduce your plumbing insurance costs:
- Bundle policies. A business owners policy (BOP) is a good way to reduce costs. It combines three essential coverage types and is usually cheaper than buying each policy separately. You can add more coverage types (like commercial auto) if you need them.
- Manage your risk. You could qualify for savings if you create and document a safety program for your workers.
- Choose a higher deductible. Choosing higher deductibles means the insurance company pays less if you file an insurance claim, which generally results in cheaper plumbing insurance premiums.
- Shop around. Not all insurers price plumbing insurance the same, which is why it’s a good idea to get business insurance quotes from several companies.
Where Can You Get Plumbing Insurance?
A plumbing insurance policy should meet the risks and challenges of the industry. Most insurers sell common types of business insurance, such as a BOP, and you can customize your policy with additional coverage types.
Here’s a list of small business insurance companies:
- Acuity
- Allianz
- Allstate
- American Family Insurance
- AmTrust Financial
- Auto-Owners Insurance
- BiBERK
- Chubb
- Cincinnati Insurance
- Clear Blue Insurance
- CNA
- Erie Insurance
- Farmers Insurance
- Frankenmuth Insurance
- The Hanover
- The Hartford
- Liberty Mutual
- Nationwide
- State Farm
- THREE by Berkshire Hathaway
- Travelers
- Utica First Insurance
- Westfield Insurance
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Plumbing Insurance FAQ
Why would a plumber need insurance?
Plumbers deal with various risks, like injuries while working with hot water heaters, stolen tools or clients who make claims of incomplete and shoddy workmanship.
A good plumbing insurance policy is a mix of small business insurance coverage types that meets the demands of the profession, such as lawsuits, car accidents and workplace injuries.
What is liability insurance for a plumbing business?
General liability insurance for a plumbing business covers property damage and injuries accidentally caused to others. For example, if someone slips and falls on a wet floor at a jobsite, your liability insurance can pay for their medical expenses and legal costs if you get sued. It also covers other types of costs, such as copyright infringement, reputation harm and advertising injury
Does my plumbing business need a commercial auto policy?
Your plumbing business needs commercial auto insurance if you use a vehicle for work-related purposes, such as transporting plumbing tools to a jobsite. Your personal car insurance won’t cover business use of a vehicle.
