As a plumbing professional, you face risks every time you answer a call and go to work. Whether you work alone or with a team of plumbers under you, it’s crucial to have the right specialized plumbing insurance to protect your business from those risks.
You’ve trained hard to receive the necessary certifications and work towards building your business. You’ve carved out a nice small business for yourself in what is a lucrative trade. And no doubt, you’ve invested tens of thousands or even hundreds of thousands of dollars in tools, supplies, vehicles, and staffing to contribute to the successful operations of your plumbing business.
So, what happens to your business if something goes awry? What have you done to protect your investment in your business? Do you have the cash reserves needed to address a financial threat to your company?
The truth is that plumbers face unique threats every day. You install pipes going in and out of homes and businesses, fix water leaks, and work around gas connections and gas lines that have the potential to be severed. You also have your employees to consider. What if they’re hurt while working for you?
Your plumbing business faces liability risks, property damage risks, bodily injury risks, personal injury risks, and more. PlumbingPro insurance helps manage those risks for you so that your business can thrive and remain successful.
Does My Business Need Plumbing Insurance?
If your business involves any of the following, you need plumbing insurance to protect your company’s financial interests:
- Plumbing service work
- Gas line installation and repair
- Drainage system installation
- Septic system construction
- Sump pump installation
- Sewer hookup
- Water system testing and balancing
- Water pump installation
Plumbing professionals have higher exposures than many other types of small businesses. There’s always the chance that work performed by one of your employees could cause damage or an injury. Unfortunately, there are also hidden hazards and risks that you might not think of until it’s too late.
In addition, most states require plumbers to have liability insurance at a minimum, and potential customers will most certainly want to hire a company that is adequately insured.
But more than that, the right plumbing insurance will help to manage the financial and legal ramifications that arise from expensive claims and lawsuits against your business.
How Much Does Small Business Insurance Cost for Plumbers?
Different factors will determine how much a plumbing insurance policy will cost your business. These include:
- The specific functions your business performs in its operations
- Whether or not you own commercial property and need to obtain property insurance
- Your business’s claims history
- How many employees your business has, and what the payroll is
- The assets owned by your business
Other factors could influence the premium for your plumbing insurance policy. It’s advisable to speak to a specialized business insurer about the particulars involved in your business. In many cases, an insurance company can bundle policies to help lower the cost of your premiums.
Types of Plumbing Insurance
Small businesses typically benefit from several types of insurance policies, and plumbing contractors are no exception. An experienced insurance agent can help to determine which policies are specifically needed for your business. But, most plumbing businesses will need some or all of the following types of insurance:
- Commercial general liability insurance
- Workers compensation insurance
- Contractors pollution liability insurance
- Umbrella liability insurance
- Professional liability insurance
- Commercial vehicle insurance
- Employment practices liability insurance
- Commercial property insurance
- Inland marine insurance
Commercial General Liability Insurance
Commercial general liability coverage is needed for every small business owner, including plumbing contractors. Anytime you do business on someone else’s property, there’s a risk that something could go wrong.
If someone claims wrongdoing by your company, commercial general liability coverage offers extensive protection for your business against claims associated with bodily injury, damage to a client or third party’s property, and related medical expenses.
General liability/Property damage claim example: Think about what would happen if one of your employees fails to tighten a connection correctly. The next day you receive a call from your customer that water leaked into the kitchen, damaging the new high-end floor they just had installed.
There’s also water damage to the molding, cabinet, and surrounding areas. This would be considered property damage covered by a general liability policy. An insurance policy would help pay for those types of damages, while easing the financial burden on you and your business.
General liability/Bodily injury/Personal injury claim examples: Let’s say you’re installing a water heater at a school. Unfortunately, before you realize it, there’s a malfunction of the temperature setting, and one of the students scalds themselves when washing their hands.
The parent is likely to blame the school, while the school is likely to blame you and launch a claim against your plumbing business.
Without general liability coverage, your business would have to pay for the student’s medical treatment. If the parent decides to sue you, general liability would also pay for legal expenses and any resulting amounts awarded by the courts. A lawsuit by the parent is an example of a personal injury claim.
Worker’s Compensation Insurance
According to Business Insider, plumbing ranks as one of the most dangerous jobs in America. If you have employees who work for you, you don’t want to neglect coverage for them if anything should happen to them on the job.
Worker’s comp insurance was created to fit this need. It provides dual benefits — protection for your business and compensation for your workers for work-related injuries or illnesses.
Plumbing work has several potential hazards. Not only are your workers doing their job in wet, slippery environments, but there’s also the potential for exposure to mold, asbestos, raw sewage, chemicals, and other toxic substances.
Plumbers also work in confined areas that are difficult to access, placing them at a higher risk for musculoskeletal disorders and injuries.
Appropriate coverage for your workers is a must. In fact, most states require that businesses carry workers’ comprehension coverage for their workers.
Suppose one of your workers has an injury or illness received while working for you. In that case, workers’ comp will pay for lost income, medical treatment related to the claim, and any legal expenses to defend your business if the employee decides to sue.
Workers’ Comp claim example: Imagine that a customer calls your plumbing company to replace a leaking water heater. The water heater is located in an attic. Water was allowed to leak for some time because when your worker goes into the attic to change out the water heater, the rotting floor collapses, sending your worker through the ceiling of the lower level.
Your worker suffers injuries and needs medical attention. Doctors determine that your worker will also need to be out of work for a few weeks to recover. It’s a good thing you have worker’s comp to pay for your employee’s medical expenses and lost wages.
Also, because your employee feels like he is being taken care of, he is more likely to return to work and not take legal action.
Contractors Pollution Liability Insurance
Plumbers work in conditions that predispose an environment to pollution. Plumbing operations can sometimes involve the repair or installation of water supply lines and waste disposal systems.
Both of these are highly conducive to pollution exposures, such as mold, toxic chemicals, sealants, underground utility lines, contaminated soil, and more.
General liability policies typically exclude pollution-related losses. So, a contractor’s pollution liability policy is vital to bridge this coverage gap. It will pay for property damage, bodily injuries, and cleanup costs that arise from pollution exposures at a job site.
Contractors pollution liability claim example: While you are probably conscientious about the proper disposal methods on a job site, one of your workers may not be as well informed or may decide to cut corners. Nearly any kind of plumbing job utilizes chemicals in its operations.
If one of your workers improperly disposes of a material like asbestos or lead, it could lead to a pollution claim against your business. In that case, a contractor’s pollution liability policy would help to manage those types of claims.
Umbrella Liability Insurance
The general liability insurance policy you choose will have coverage limits. So what happens if you choose a policy with a $500,000 limit and a liability claim made against your company results in a $1,000,000 judgment awarded against your business? That’s where an umbrella liability policy comes in.
An umbrella policy will provide the extra coverage you need to pay for amounts that exceed your general liability limits. Otherwise, you’d have to pay out of your pocket for any liability claim that is higher than your coverage limits.
In some cases, an umbrella liability policy will also pay for claims that exceed the limits of your commercial auto insurance. An umbrella policy includes payments for medical bills, legal costs, damage to someone else’s property, and any settlements or judgments awarded by a court.
Umbrella liability claim example: Imagine for a moment that the worst happens. You and your workers are contracted to replace the outgoing sewer lines at an apartment complex. Your worker inadvertently hits a natural gas line buried underground. But, before the area is secured, a passerby lights a cigarette, prompting an explosion.
Multiple lawsuits are launched against your plumbing business as the blast has taken out half the apartment, which is worth $750,000. Numerous people were injured and killed in the explosion, resulting in a few lawsuits against your business. The problem is that you only chose a $500,000 limit per occurrence in your general liability policy.
Lawsuits of this magnitude could bankrupt your business and permanently put you out of commission. On the other hand, the financial impacts could be minimal with an umbrella liability policy that pays for damages outside of your general liability limits.
Professional Liability Insurance
There’s no doubt that when someone consults your business on a plumbing matter, you offer your best advice with the knowledge that you have. Unfortunately, there are sometimes unforeseen circumstances where a customer might claim otherwise.
Someone could levy a claim that your business recommended an unnecessary service, offered poor advice, or was negligent or made a mistake. And let’s face it. Sometimes honest errors happen.
Professional liability insurance was created for unintentional mistakes or claims like these. Think of it as malpractice insurance against your business. This type of claim is also called an errors and omissions (E&O) policy.
Professional liability insurance for plumbers will cover the judgments and legal fees if your company has a lawsuit against it by a dissatisfied customer. If your company is found liable, E&O insurance will also help cover the repair costs for the job that led to the claim.
Professional liability claim example: Several months after you and your employees put new pipes in a large commercial building, sewage backs up and floods the basement of the building. The owner of the facility claims that there is a defect in the work.
It was a $20,000 contract, and the owner wants your company to clean up the mess and redo the work. Professional liability insurance would cover the $20,000 loss.
Commercial Vehicle Insurance
Just as you need personal auto insurance to cover your private vehicles, you need commercial auto insurance for your business’s vehicles. Your private auto insurance won’t cover the vehicles involved in your work.
Think of how financially devastating it would be if one of your company vehicles were responsible for collision damage to another vehicle or third-party property. Without the right coverage, it could be disastrous for your business.
On the other hand, commercial auto coverage would pay for medical expenses, vehicle damage, or other damages that arise from a collision where you or your workers are named the responsible party. Even if you or your workers use a personal vehicle for work-related travel, it must be covered through a commercial auto insurance policy.
Commercial vehicle claim example: Suppose you ask one of your workers to pick up some plumbing hardware from the store and deliver it to a customer on the way to work. Your work truck is already loaded, and you have several customers to see, so you’re just trying to get ahead of the game.
Unfortunately, your employee is distracted by a cell phone ping and gets into an auto accident on the way to the customer’s house.
Because your worker is at fault while working for you, his personal auto insurance will not cover the claims. In this case, your company’s commercial vehicle insurance would kick in to help cover the damages.
Employment Practices Liability Insurance
In 2020, there were 67,448 discrimination charges filed with the Equal Employment Opportunity Commission. These charges typically surround workplace practices that discriminate on a worker’s race, job position, wrongful termination, salary, religion, color, age, or disability status, among others.
Even if an employer doesn’t intentionally mean to discriminate, an employee might not see it that way.
Employment Practices Liability Insurance (EPLI) will cover your business if a worker makes a claim that their legal rights have been violated. An EPLI policy will help pay for the cost to defend you in court and for any settlements or judgments that arise from the suit.
Employment practices liability claim example: Imagine that you have four plumbers who work under you. Frank, Pete, Jim, and Carlos. You have decided to step back from managing everything on your own and want to promote one of your workers to a management position.
Both Frank and Carlos have worked under you for the longest length of time. But, you decide to promote Frank because he has better leadership skills.
Carlos feels slighted and thinks you promoted Frank because Carlos is of Latino heritage. He files a lawsuit against your plumbing business alleging discrimination.
An EPLI policy would pay for the cost to defend your business, whether it wins its case or not. It will also pay the settlement if the court sides with Carlos.
Commercial Property Insurance
Many plumbing companies operate their business from a commercial building that they rent or own.
If you have a commercial building, it shelters most of the tools and inventory you need to perform your plumbing work. And if you own the building, your investment is even more substantial.
That’s why it’s vital to have a comprehensive commercial property insurance policy for all inventory stored at your business’s premises as well as for the building, furniture, and any personal property on-site.
A commercial property insurance policy will protect against fire, lightning, and other weather-related covered events and theft.
Commercial property claim example: A severe storm hits your commercial property overnight. Lighting causes a tree to fall onto your commercial building, destroying much of the structure and contents.
You arrive at work the following day, unable to comprehend how much damage there is. You begin to get nervous, but you remember that your commercial property insurance will cover most of the damages.
It will be rough going for a couple of days, but you’ll be back to work in no time. Your insurance agent has assured you that you’ll be compensated to replace the items and rebuild.
Inland Marine Insurance
There’s always a period of time where your plumbing equipment and supplies are in transit between commercial storage and the job site. It’s vital to protect commercial cargo during that time because anything can happen.
Inland Marine Insurance is designed to provide protection when your equipment, tools, snake machines, hand augers, and replacement hardware for your customers is in route or stored by a third party. During that time, it could be stolen, damaged, or destroyed.
Inland marine claim example: You and your workers have taken on a huge plumbing job at an assisted living complex. You’ve delivered all of the hardware, ready to be installed.
It’s easier just to leave a lot of the tools and equipment needed to do the job onsite as you go back and forth for a few days.
Unfortunately, you arrive one morning to discover that many of the items you left behind have been stolen. You’re relieved when you remember that you have inland marine coverage to help replace the items.
Protect Your Plumbing Business With Comprehensive Insurance Coverage
As you go about running your plumbing business day after day, you don’t need the added worry of being underinsured. It’s crucial to find the right coverage for your business. The types of policies you get should be tailored for the specifics of your plumbing operations.
Talk with a specialized insurance professional to learn more about the legal requirements for your plumbing business as well as what the best commercial insurance solutions are for your company.
Reach out to PlumbingPro by NIP Group. We offer comprehensive, tailored insurance specifically for plumbing contractors all over the U.S.
As an A.M. Best A+ rated insurance carrier, you can rest assured that we will handle any covered event swiftly with the utmost professionalism.