What Insurance Do You Need To Be a Plumber?
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Plumbing insurance provides vital financial protection for businesses in the plumbing industry, covering liability and property damage claims. Many policies include general liability, commercial property, professional liability and workers' compensation, providing plumbers with a comprehensive suite of business coverage.
Learn about the different insurance types, along with tips on how to shop for insurance for plumbers.
What Is Plumbing Insurance?
Plumber insurance is a type of coverage designed for plumbing handymen and businesses in the plumbing industry. It provides financial protection against potential risks and liabilities associated with plumbing work, such as incorrectly installed pipes and negligence. It can also include coverage for the plumber’s tools and equipment if they are stolen or damaged.
It should be noted that plumbing insurance isn’t always a specific product sold but rather, a collection of different coverages that would be useful to a plumbing professional. These coverages often include general liability, professional liability and commercial property insurance.
Why Do Plumbers Need Insurance?
Depending on your state, insurance may be required as a condition of getting your license. For example, New York requires plumbers to carry at least $1 million in general liability coverage to receive a plumbing license.
Who Needs Plumbers Insurance?
Any type of professional that deals with plumbing should buy plumbers insurance, including:
- Plumbing contractors
- Septic system technicians
- Piping specialists
- Installers of drainage systems
- Contractors specializing in sewer hookups
- Drainage system installers
- Sprinkler installers
- Contractors for sump pump installation and maintenance
- Experts in water pump installation and servicing
- Contractors specializing in water system balancing and testing
What Types of Insurance Do Plumbers Need?
Business Owners Policy (BOP)
Mimicking the handiness of plumbers, business owner policies are useful insurance packages that roll general liability, business property and sometimes business interruption insurance into a single policy. BOPs are ideal for anyone looking to save money while starting a new plumbing business or an LLC.
General Liability Insurance
General liability insurance, or plumber liability insurance, is one of the most common insurance types, protecting against bodily injury, property damage and personal injury liability claims. So, if a prospective client stumbles and breaks their phone while at your business office or if you accidentally knock over an expensive vase inside a client’s home, your insurance will cover the cost of repairs or replacements.
Commercial Property Insurance
Commercial property insurance protects inventory, tools and any physical structure owned by your plumbing business if a fire, break-in, windstorm or some other covered peril damages any of your company's property. That means you won't have to worry about your 22-piece Milwaukee plumbers tool kit if it gets destroyed by a fire that consumes your warehouse or office because your insurance should cover a new set.
Business Interruption Insurance
Business interruption insurance is an invaluable commercial coverage that provides you and your plumbing business with wage replacement, loan payments and funds for temporarily relocating your plumbing operation if your current office becomes unusable. Covered losses include hail, fire, windstorms, theft, vandalism and more.
Professional Liability Insurance
Professional liability insurance, or errors and omissions insurance (E&O), covers claims of negligence, misrepresentation and defamation. An example would be if you were sued because you installed plumbing incorrectly for a new-build house, which caused the contents to not drain properly. Professional liability insurance would cover the damages, as well as your legal defense costs.
Commercial Auto Insurance
Commercial auto insurance operates similarly to personal auto coverage, covering primarily liability claims but also damage to your vehicle and the medical needs of you and any passengers you may have, depending on the coverage included in your policy.
Remember that auto insurance claims are the second most costly at $45,000 according to The Hartford.
Additional Policies To Consider
The below coverages can help extend your plumbing insurance protection.
- Workers' compensation insurance: Covers medical benefits and lost wages for workers injured or made ill due to work-related causes. This coverage is usually required for any plumbing business with employees.
- Tools and equipment insurance: Provides financial protection for any plumbing tools or equipment used for your trade if damaged, destroyed or stolen. Covered equipment may include power tools, pipe benders, soldering supplies, hand tools, etc.
- Equipment breakdown insurance: Covers the cost of replacement or repair for equipment such as water heaters and sump pumps that are damaged by an accidental or sudden event, as well as extra damage protection should something you install be faulty and cause a client bodily injury or property damage.
- Cyber insurance: Covers data breaches, including client details, and offers financial assistance for investigations, litigation, lost revenues and system improvements.
How Much Does Plumbers Insurance Cost?
The cost of plumbing contractor insurance will depend on a number of factors, including how long you've been in business, where you're located, how many employees you have, your claims history and what types of coverage you purchase. Below is a simple table that breaks down the above coverages by average annual cost.
Average Annual Cost
Business Owners Policy
$350 to $2,500
$365 to $1,700
$500 to $3,500
$500 to $1,500
$300 to $2,500
$750 to $2,500
$375 to $1,400 per employee
Tools and Equipment
$150 to $540
$650 to $2,357
How To Get Plumbers Insurance
To secure the necessary insurance coverage for your plumbing business, follow these steps:
- Identify the specific policies suitable for your plumbing business, which will often include general liability, professional liability and commercial property coverage.
- Streamline the gathering of insurance quotes using SmartFinancial. You can provide details such as your location and number of employees to get matched with a policy.
- Evaluate coverage limits, deductibles, exclusions, premiums and any additional benefits or features offered by each insurance provider.
- Look for customer reviews, seek ratings from independent rating agencies and gather relevant information to assess the reliability of each insurer.
- Ensure you have all the necessary coverage for your plumbing business included and that they accurately reflect your requirements. Once satisfied, make the required payment to secure your insurance policy.
- Review your policies annually, making necessary updates to account for any changes in your operation, location, or evolving needs.