When you own a plumbing business, it’s essential to properly protect your livelihood. From burst pipes to on-site injuries, the right insurance coverage makes all the difference when navigating the unexpected.
In this article, we’ll explore different types of plumber insurance coverage. Whether it’s General Liability, Workers’ Compensation, Inland Marine, Commercial Auto, or Umbrella coverage, each coverage plays a vital role in safeguarding your business. If you’ve ever wondered what plumbers insurance covers, read on to learn more.
Common Types of Plumbing Claims
It’s important to understand real-world scenarios where different types of plumber insurance coverage come into play. Below are a few common claims and scenarios:
- General Liability
Tom is repairing a leaky pipe in an upscale home. The homeowner is hosting a large dinner party that evening, and Tom is under pressure to get the job done quickly. While working under the sink, Tom accidentally loosens a joint, causing water to flood the hardwood kitchen floors and custom cabinetry. - Worker’s Compensation
Sarah slips and falls while carrying a heavy pipe across a wet floor. Her injury requires an orthopedic consult, diagnostic imaging, and ongoing physical therapy. Unable to continue working, Sarah now faces a loss of income. - Inland Marine
Mike parks his company truck in a lot near the job site at the end of his shift. The following day, he returns to discover thieves have broken into his truck and stolen high-end power tools and copper piping. - Commercial Auto
Maria runs a stop sign while responding to a late-night emergency call. Both vehicles are totaled. Medics transported the other driver to the hospital for imaging with complaints of neck pain. - Umbrella
Maria runs a stop sign while responding to a late-night emergency call. Both vehicles are totaled. Medics transported the other driver to the hospital for imaging with complaints of neck pain.
Let’s explore the types of plumbers insurance coverage you might consider to protect your people, property, and business in each situation.
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General Liability Insurance: Your First Line of Defense
Thomas McMillan, commercial lines staff underwriter at Central Insurance, cautions that accidents are not uncommon in plumbing. He shares a cautionary tale about a plumber whose mistake caused thousands of dollars in damages to a custom closet in a high-end home.
“Without proper insurance coverage, the claim could have easily bankrupted his small business,” he says. “That’s why general liability is vital for plumbers. It protects them from accidents that can happen on any plumbing job.”
What it covers:
- Property Damage: Third-party personal property damage is a significant plumbing risk. General liability insurance covers these claims, ensuring the plumber is not liable for any financial fallout.
- Bodily Injury: Plumbers often work in homes and office buildings where other people are present. Tools left lying around are a trip and fall hazard. Injuries can lead to medical expenses, lost wages, and pain and suffering. General liability insurance helps cover these costs, protecting the plumber from potentially devastating legal expenses.
- Legal Defense: The legal costs of defending against a lawsuit can be significant. General liability covers legal defense fees, which can protect a business from financial ruin when navigating a lawsuit.
- Reputation Protection: Many clients and contractors require proof of general liability insurance as part of the contractual agreements. Liability insurance is essential for plumbers to secure jobs and build trust with clients.
Workers’ Compensation: Protecting Your People
According to a 2020 AdvisorSmith survey of 1000 small businesses, three in four respondents said their business experienced an event that could have led to an insurance claim in the past year. Burglary and theft topped the list, with employee injuries following closely behind.
Workers’ Compensation insurance is vital for plumbers. It offers essential protection for employees and employers in an industry where physical demands are a daily reality.
What it covers:
- On-the-Job Injuries: Plumbing is a physically demanding job. It often involves working in confined spaces, handling heavy materials, and exposure to sharp tools, hot pipes, and slippery surfaces. Workers’ Comp ensures that if a plumber suffers an on-the-job injury—such as a back injury from lifting heavy pipes or a burn—they receive medical treatment without the burden of out-of-pocket expenses.
- Wage Replacement: Workers’ Comp provides wage replacement benefits when a plumber cannot work. By covering a portion of the lost wages, Workers’ Comp allows injured employees to focus on their recovery without added financial stress.
- Employer Protection: For business owners, Workers’ Compensation insurance is not just about taking care of employees; it’s also a critical layer of protection for the business. In most states, Workers’ Comp is a legal requirement and shields employers from costly lawsuits if an employee sues over a workplace injury.
- Rehabilitation and Return-to-Work Support: Workers’ Comp also often includes rehabilitation services to help injured employees recover quickly and return to work faster.
Inland Marine: Protecting Tools and Materials
“Plumbers don’t always think about the risks associated with their tools,” McMillan says. “Tool theft or damage can halt work and delay jobs. Without proper coverage, a plumber would have to pay out of pocket to replace essential equipment.”
Losing essential tools or materials can significantly impact a plumbing business by delaying projects. Inland marine coverage helps minimize disruptions by covering stolen or damaged property costs.
What it covers:
1. Tools and Equipment Protection: Plumbers rely on their tools. Inland marine insurance covers tools, equipment, and materials while in transit between jobs or stored at a temporary location like a job site.
2. Job Site Materials Coverage: Plumbers often transport costly materials, such as copper piping, water heaters, and tools. Inland marine insurance protects these materials against theft, vandalism, or damage while in transit.
Commercial Auto Insurance: Safeguarding Your Fleet
Plumbers rely on company vehicles to transport tools, equipment, and materials to job sites. However, personal auto insurance policies typically don’t cover vehicles used for business purposes. Commercial auto insurance ensures you’re properly covered while driving between jobs.
What it covers:
- Vehicle Damage: In the event of an accident, commercial auto insurance can cover the costs of repairing or replacing the vehicle and medical expenses for the driver and any passengers.
- Third-party Claims: If a plumbing vehicle is involved in an accident that damages another person’s property or results in injury, commercial auto insurance helps cover the costs associated with these claims.
The risk of high-cost plumbing claims is significant due to potential property damage, bodily injury, and legal disputes. Umbrella coverage provides an additional layer of liability protection beyond the limits of existing policies.
What it covers:
- Excessive Damages: While primary commercial insurance covers many professional risks, standard policy limits may not be sufficient for excessive or catastrophic claims. Umbrella coverage offers additional protection by extending policy limits.
- Legal Fees: Legal fees and court costs can quickly escalate in the event of a lawsuit. Umbrella insurance helps cover excess litigation expenses.
The Central Difference
“Insurance gives plumbers peace of mind by providing a safety net. It’s important to choose a provider that understands the plumbing industry,” McMillan says.
In addition to offering a range of plumbing insurance coverages, Central works closely with policyholders to reduce exposures and prevent claims.
“Prevention is the best form of protection,” McMillan says. “Protecting your business might mean pulling motor vehicle records before hiring, drug testing employees, implementing mandatory training, or adding telematics to your company vehicles. We strive to be a partner in prevention, and our Loss Control team can help you revamp existing safety protocols or develop a safety program from scratch. Our goal is to help protect your business however we can.”
Ready to find out how Central can protect your plumbing business? Find an agent to get started.
