Whenever you’re working on someone else’s property, there’s always the chance that something could go wrong. Plumbers liability insurance can protect your business in case of an accident. This type of general liability insurance covers you and your business against damage to third parties and their properties.

Although plumbers are highly skilled and trained professionals, there is always a risk of property damage and injury on the job. Plumbers liability insurance not only protects you from accidental injury or damage, but also employee injury, advertising injury, and negligent work claims. 

What is general liability insurance?

General liability insurance protects against personal injury, third-party injury, property damage, and advertising injury. For instance, if a client injures themselves while you’re making a repair, general liability insurance will cover legal fees, medical expenses, and settlement fees. It also helps cover property damage you might cause during a repair.

In addition to general liability insurance, you may wish to invest in other types of insurance. Tool and equipment insurance protects against theft and damage, while professional liability insurance covers professional negligence, breach of contract, professional error, or failure to deliver a service on time. Adding more coverage ensures that if accidents occur, you won’t have to pay out of pocket.

Is liability insurance required for plumbing contractors?

Laws vary from state to state, but generally, most states require general liability insurance for plumbing contractors. Even if your state doesn’t require it, it’s still a good idea to be insured. Paying fees for property damage, legal representation, settlements, and more could easily bankrupt a plumbing business.

If your state requires plumbers’ insurance and you don’t get it, you’ll likely be subject to harsh consequences. For example, you may lose your license and be subject to state administrative actions—all on top of paying the costs of the claim out of pocket.

What does plumbers liability insurance cover?

You can add more coverage to your insurance policies, such as a business owners’ insurance bundle or professional liability insurance. However, general liability plumbers insurance typically covers:

  • Bodily injury: If a third party suffers bodily injury at your worksite, such as tripping, falling, and breaking a bone, insurance will cover their medical expenses, lost wages, and other settlement fees.
  • Property damage: If you accidentally damage the property, your insurance policy should cover the cost of fixing or replacing certain items.
  • Advertising injury: Advertising injury occurs when a company hurts another company’s reputation, or when an advertisement constitutes an invasion of privacy. For instance, if you made a commercial announcing that Company X is known for causing floods in clients’ homes, they could file a lawsuit against you and your business.

Note that plumbers insurance does not cover situations like workers’ compensation, tool theft or damage, catastrophic injury, commercial auto insurance, or surety bond insurance. If you want coverage for those items, you’ll need additional policies. 

Cost considerations for plumbers liability insurance 

There are several factors which can affect the cost of liability insurance. It’s best to contact several carriers to find out which rates are right for you.

Plumbers liability insurance is usually based on the following factors:

  • Company age: The longer you’ve been in business—and the better your insurance and accident history—the lower your rates will be. That’s because newer businesses are more of a risk to insurance carriers. Without a history for comparison, insurance carriers need to offset their costs.
  • Accident history: Similarly, a carrier will consider how many claims you’ve filed compared to your company age. Insurance is made to cover accidents—but if you have a poor track record, you’re a bigger risk to insure. You can expect higher rates in this situation.
  • Credit history: Not every insurance carrier considers credit history, but a positive credit rating can help you snag better coverage and lower premiums.
  • Employees: Your insurance carrier will also consider how many employees you have, their age, their training (and where they’ve trained) along with their personal plumbing history. As a general rule, you can expect that the more employees you hire, the higher your premiums will be.
  • Sales and revenue: The more business and revenue you bring in, the higher the premiums. After all, someone who is doing a million dollars in business has more of a chance of error or accident than someone who does $100,000 each year.
  • Location: Certain states are better regulated than others, which is why plumbers liability insurance can vary from location to location. 

What other types of insurance do plumbers need?

Consider adding these types of coverage to your plumbers liability insurance:

  • Professional liability insurance: This covers any claims of professional negligence, breach of contrail, failure to deliver a service on time, or professional error.
  • Business property insurance: Business property insurance covers certain property damage to your place of business, such as if a flood damages your office.
  • Workers’ compensation insurance: Workers’ compensation insurance is required by most states. This insurance covers medical expenses and wage loss for any on-the-job injuries your employees suffer.
  • Commercial auto insurance: If you have a work vehicle, commercial auto insurance covers expenses related to accidents, injuries, death, and property damage. For instance, if you hit someone in the Home Depot parking lot, your commercial insurance will cover the damage.
  • Product liability insurance: Sometimes the products plumbers use are defective. If a defective product causes injury or property damage, this insurance will cover your claim.
  • Tools and equipment insurance: Tools and plumbing equipment can be quite expensive. This type of insurance will cover the costs to repair or replace your equipment.

Be sure to ask whether you can bundle these policies into a business owner’s policy. Many carriers will allow you to bundle certain coverage types under one policy.

Protect your business with plumbers liability insurance

Plumbers liability insurance helps protect you, your business, your customers, and your reputation. If you own your own plumbing company, you shouldn’t go without it. Fortunately, NorthOne’s small business banking services can help you budget for insurance expenses. 

Find out why small business owners across the United States love our intuitive, feature-rich banking services—apply for an account today: 

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