What Is Plumbing Insurance? Cost & Coverage Explained

General liability insurance is the most important policy for plumbers because it covers the risk of third parties suing over property damage, bodily injury, and reputational harm. One type of general liability claim can be a bodily injury loss. For a plumber, two common ways for a bodily injury claim can be as follows:

• A delivery person breaks their leg, tripping over the hosepipe you forgot to put away.
• A homeowner slips and falls on water from a worksite that is not properly cleaned up or lacks any type of caution signs to let people know there is standing water.

For losses like these, general liability helps with court costs, attorney’s fees, and settlements or judgments against you.

Commercial property is a first-party insurance, meaning it exists to help a business with its property. It does so by paying to repair or replace any business property that is damaged, lost, or stolen and falls under a covered loss. Commercial property losses are covered under a named peril basis and typically include the following:

• Theft
• Vandalism
• Fire
• Windstorm
• Hail

Commercial property can be purchased for a building and its contents. In those situations, the coverage is limited to the location listed on the policy.

If you need your tools and equipment covered when they aren’t at the office, you’ll want inland marine insurance. Sometimes, insurers will sell inland marine as “tools and equipment” coverage as an endorsement for general liability.

Not every plumber will need a commercial auto policy. If you drive your regular vehicle to job sites, this is just like commuting to work. However, if you have a work truck or van used primarily or solely for the business, you will need a separate commercial auto policy. Commercial auto insurance is a special policy with multiple types of coverage that you can add.

• Liability: Pays for injuries to a third party or damage to their property
• Collision: Pays for repairs to your business-owned vehicle if it is damaged in a car accident
• Comprehensive: Pays for repairs to your business-owned vehicle if it is damaged in an event other than a collision, such as vandalism or theft
• Medical payments: Pays medical bills for you, your insured driver, and your passengers regardless of fault

Keep in mind that commercial auto insurance will be required for your business. This is one of two types of small business insurance required in nearly every state.

The other type of required coverage is workers’ compensation insurance. This important policy is required in every state except Texas and South Dakota. However, every state has a different threshold of requirements based on how many employees your business has.

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Without workers’ compensation, plumbers would be responsible for covering their injured employees’ medical bills and lost wages or paying death benefits to the survivors of an employee who is killed on the job.

Looking for some guidance on the difference between workers’ comp carriers? Learn more about top workers’ comp providers in our buyer’s guide, along with their pros and cons and standout features.

While not insurance, a surety bond functions very similarly to insurance. Here is how a surety bond works: it is a financial guarantee that your work will follow regulations and be completed on time. If your work is incomplete or not up to code, your customer can file a claim with the bond issuer, who then reimburses your client. A significant difference from insurance is that with a surety bond, bond issuers expect you to pay back the claims they pay.

Importantly, surety bonds are often required by state governments, local governments, or local license boards. Even if you don’t need a surety bond for a plumber’s license in your state, you may find clients who only want to work with plumbers who are bonded.

Short answer: nothing good. If you are faced with a loss while being uninsured, it could cost you your business and, depending on how it is structured, your personal assets, too. If it is a workers’ comp loss and you are uninsured, you may be hit with compliance fees from the government on top of being responsible for the loss. The cost of insurance is far less than the cost of being uninsured when something goes wrong.

Plumbing insurance can help you if your business suffers a loss by paying to repair or replace your property or stepping in and handling a lawsuit on your behalf. But plumbing insurance coverage can also benefit your business if you are trying to bid on a job and need proof of insurance.

Workers’ compensation and commercial auto are the only two types of insurance for plumbers that are required. Workers’ comp requirements will come down to the specific laws of your state. Beyond that, there are no broad requirements for plumber’s insurance. However, many local governments and licensing boards can require general liability and a surety bond to be licensed.