Finding the right insurance for your plumbing business is an important step in protecting and growing your business.
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Plumbing businesses can be affected by many risks, including the possibility of employees accidentally breaking a valuable item at a client’s home, causing someone else to be injured, or injuring themselves. Coping with these and other potential hazards can consume a large portion of your resources. This is why it’s a good idea to obtain a broad range of insurance policies to financially protect your company.
What insurance coverage do I need for my plumbing business?
There are many types of insurance coverage to consider, but these policies are particularly relevant to plumbing companies:
General Liability Insurance
General liability insurance covers accidental damage or injury to third parties and third-party property—an important concern for plumbers, who typically perform work at a variety of locations. No matter how careful your employees are, there’s always a chance that they could unintentionally damage someone else’s property or cause an injury, and your company could be sued for damages if that happens. General liability insurance can provide funds to cover legal fees, judgments, settlements, and medical payments. General liability also includes a personal and advertising injury component, which provides coverage for a number of non-physical injuries, including libel, slander, and copyright infringement.
A critical part of general liability insurance for plumbers is the products and completed operations component. This covers property damage or injuries that take place away from your business’s premises and are caused by your work after it has been completed. However, it’s important to note that products and completed operations coverage does not cover damage to your product or completed work itself; it only applies if the completed work causes damage to a customer’s other property.
Examples:
- Bodily injury: While installing piping in an office, one of your employees leaves tools out in a hallway. Someone passing by trips over the tools and falls, injuring her hip. Your general liability policy would cover medical expenses, as well as any legal fees if the injured person sues.
- Property damage: While repairing a client’s shower, your employee accidentally damages the shower wall. Your general liability policy would cover the cost of repairs.
- Products and completed operations: A new plumber at your company installs a valve incorrectly in a client’s bathroom, causing a leak. By the time the leak is discovered, the surrounding wall and floor have been damaged. Your general liability insurance would cover the repairs.
Commercial Property Insurance
Commercial property insurance will protect the value of your business property if it is destroyed or damaged. If an unexpected disaster strikes your office building or damages your equipment, it can be time-consuming and costly to recover from the loss without insurance coverage. Commercial property insurance can help provide funds to replace or repair damaged business property, including tools, supplies, signage, and more. Commonly covered perils include windstorms, hail, fire, vandalism, explosion, and water damage.
Commercial property insurance covers the following:
- Buildings belonging to or leased by your company
- Contents of the building, including equipment, tools, and supplies
- Property of others while it is under your care, custody, or control
Example:
- A fire breaks out in your office complex and spreads to your storage area, destroying much of your equipment and tools. Your commercial property insurance would cover the loss.
Commercial Auto Insurance
If your business owns or leases vehicles titled under the business’s name, commercial auto insurance is a key coverage to secure. If one of your employees is driving a company vehicle and causes an accident, your commercial auto insurance will pay for any resulting third-party bodily injury, property damage, or pollution cleanup. Commercial auto insurance also covers the value of the vehicle itself if it’s damaged by a collision or another peril, like a falling object or theft.
If your employees drive their own vehicles to clients’ locations, you may need to add hired and non-owned auto insurance. This coverage will protect your company if an employee is at fault in an accident while driving a personal vehicle for work purposes.
Example:
- When parking a company van at a client’s home, one of your employees forgets to engage the parking brake. The vehicle rolls into one of the client’s walls, damaging it. Your commercial auto insurance would cover the damages to the home as well as to your company vehicle.
Inland Marine Insurance
Inland marine insurance provides financial protection for your business property that does not remain at a fixed location and is not covered by a standard commercial property insurance policy. This could include equipment, tools, supplies, and other items that a company may need to transport from location to location or store at client sites. Plumbers regularly use a wide variety of specialized equipment and tools in the course of their work, from motorized drain snakes to soldering and caulking equipment. Inland marine insurance covers the equipment your plumbers take with them to perform their work.
Example:
- Your team has been hired to repipe a customer’s home. Because the job will take several days, you leave some of your equipment and tools on the job site. Over the weekend, the customer’s home is burglarized, and your equipment is stolen. Inland marine insurance would reimburse you for the lost items.
Workers’ Compensation Insurance
Workers’ compensation insurance is legally required in almost all states, and it’s particularly crucial coverage for plumbing companies. The physical nature of plumbing can lead to injuries, and no matter how careful your employees are, accidents can happen. In the event of a work-related injury or illness, workers’ comp will provide funds for employees’ medical expenses and a portion of lost income if they are unable to earn their usual wages. Workers’ comp also provides financial benefits to surviving dependents if an employee dies in a work-related accident.
Example:
- While cutting some piping, your employee severely cuts her own hand accidentally. She needs stitches and will be unable to use that hand while it heals. Workers’ comp would pay for her medical bills and a portion of lost income while she recovers and is unable to work.
Commercial Crime Insurance
Commercial crime insurance provides funds to reimburse you for losses caused by theft, robbery, fraud, forgery, burglary, and other crimes. This coverage applies both to crimes committed by outside parties and crimes committed by your own employees. Your business may own valuable equipment that may be left at worksites, and plumbing companies could be targeted for theft by employees or others. There is also a risk that employees could commit fraud. Commercial crime insurance can give you financial protection if your business suffers losses due to a variety of crimes.
Example:
- Your business accepts check payments from customers. An employee of yours alters some of the checks that you’ve received and cashes them as her own. Your commercial crime policy would cover the losses.
Additional Coverages
- A business owner’s policy combines general liability, property, business income, and extra expense coverage into a single package. For small or midsize plumbing companies, this type of insurance could help you obtain a wide range of coverage. Premiums for a business owner’s policy are typically cheaper than the cost of buying each coverage separately.
- Business income coverage will reimburse you for lost income and operating expenses if your business is forced to temporarily close due to a covered peril, such as fire, storm damage, or other property damage. This is an important coverage for plumbing businesses, as continuity of service is vital for establishing a good reputation and providing quality customer service.
- Equipment breakdown insurance covers repairs or replacement for equipment that breaks down as well as lost business income while the equipment is out of commission. Since plumbers often rely on equipment to perform their work, this is a good coverage to consider. It’s important to note that commercial property insurance typically only covers damage from external hazards, rather than breakdowns caused by something internal, like a mechanical failure.
Pricing and Quotes
Pricing for plumbing insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:
- Business size
- Industry
- Location
- Number of employees
- Claims history
Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a plumbing business with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.
In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for plumbers:
| Provider | General Liability | Business Owner's Policy | Product Liability | Professional Liability |
|---|---|---|---|---|
| CoverageSmith | ✔️ | ✔️ | ✔️ | ✔️ |
| CoverWallet | ✔️ | ✔️ | ✔️ | ✔️ |
| Embroker | ✔️ | ✔️ | ✔️ | ✔️ |
| Hiscox | ✔️ | ✔️ | ❌ | ✔️ |
Final Word
When you run a plumbing business, it’s important to consider purchasing insurance coverage that will provide financial protection from the many risks that could arise in the course of your work. If an unexpected disaster occurs, whether it’s a costly auto accident, an injury caused by your work, or a fire, recovering can be difficult and costly. Insurance coverage can give you, your employees, and your clients peace of mind and help your company continue to operate in these situations.
