Insurance for Plumbing Contractors

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Why Plumbing Contractors Need Insurance

Companies categorized under this industry work mainly in plumbing, heating, and air-conditioning equipment installation and servicing. Contractors may offer parts and labor services, as well as new work, additions, alterations, maintenance, and repairs.

Plumbing contractors are highly demanded in both residential and commercial buildings. Residents or business owners rely on you to fix their plumbing, heating, and air conditioning problems so they can continue with their daily activities. Entering different locations daily opens the window to potential lawsuits, and insurance protects your assets during these times.

Common Risks that Plumbing Contractors Face

Having no insurance in place puts you at risk for expensive and time-consuming lawsuits. Here is a look at the potential situations that can put you at risk.

  • Property Damage: You work in a maze of pipes every day and often in tight spots. One wrong move can cause a pipe to break and leak water on your customers’ property. In those cases, you are responsible for repairing or replacing any damaged customer property.
  • Auto Accidents: Plumbing contractors drive to their job sites to perform services. If you cause an accident while on the road, your business is responsible for property damages, injuries, and can be sued as a result. The same is true if one of your plumbers uses their personal vehicle to commute to job sites.
  • Employee Injury: Plumbers work with a variety of tools, and some cases need to weld or solder pipes. If they hurt or burn themselves, you need to pay their medical expenses and wages for time off work.
  • Theft of Tools: Commercial plumbing contractors often spend days at one job site leaving their tools overnight. If a break-in occurs and your tools are stolen, it is expensive to replace them.
  • Contractor Mistakes: Occasionally mistakes happen on the job. If the pipes, casings, or fittings you install rust over time causing water breaks, you can he held liable for thousands of dollars in damages.

Other potential risks include fire damage, unhappy customers refusing to pay for your services, and employment- related claims like discrimination.

What Types of Coverage do Plumbing Contractors Need?

Many states require plumbing contractors to have insurance, and some customers will require proof of insurance before hiring you. Just like for any business, general liability is necessary. If you have employees, you also need worker’s compensation. If those employees drive personal vehicles, you need hired and non-owned auto insurance too.

  • General Liability: Covers costs that arise from property damage or injury to a third party along with defense expenses if the claim goes to court.
  • Commercial Property: Pays to replace or rebuild the loss of your building or tools from covered events like fire or theft.
  • Business Auto: Pays to fix your commercial vehicles when they are in an accident and covers costs for third-party property damage or injury.
  • Professional Liability: Covers damages from mistakes you make in your work including recommending wrong steps to customers or installing bad pipes.

Cost of Plumbing Contractors Insurance

Every plumbing contractor is different, which means costs vary depending on the carrier and plumbing services you offer. Insurance carriers review plumbing experience, time in business, claims history, and whether you provide strictly plumbing or additional services like heating and air conditioning. If you are ready to get a quote today, fill out the form below.

What type of insurance does this industry need?

  • General Liability: This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy. General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.
  • Professional Liability: This policy, common in the professional services industry, helps to protect your business if a client believes they've suffered a loss due to a mistake or error made in a professional capacity. Your business may have contracts with clients or partners that require Professional Liability coverage, provide a "warranty or guarantee," or have clauses that require you to "indemnify or hold harmless" your clients. If so, Professional Liability coverage is often recommended. This coverage is also commonly recommended for any businesses providing advice related to legal or financial matters.
  • Workers Compensation: Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work. Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.
  • Inland Marine: Inland Marine insurance covers goods in-transit either on land or through shallow water, as well as certain types of movable property (such as medical equipment). If your business has valuable equipment which regularly needs to be moved, then this can be a core policy to protect your property.
  • Umbrella Insurance: Umbrella insurance offers excess liability protection in the case that your General Liability, Commercial Auto Liability, and/or Employer's Liability coverage is insufficient. It essentially acts as a "back-up" plan, providing additional financial protection in the case that your business faces a particularly large claim that exceeds a single policy's limits. This policy can be particularly valuable for a business that faces a variety of risks and has multiple liability policies.
  • Commercial Auto: Commercial Auto insurance provides coverages such as liability, collision, comprehensive, medical payments and uninsured motorist coverage. Any vehicle on the road must be insured, and any incidents that occur while a vehicle is being used for business purposes may not be covered by a personal auto policy. That's why it is so important to make sure you have Commercial Auto insurance for any vehicles owned by the business.
  • Errors & Omissions (E&O): This policy, common in the professional services industry, helps to protect your business if a client believes they've suffered a loss due to an error or omission on your part. Your business may have contracts with clients or partners that require E&O coverage, provide a "warranty or guarantee," or have clauses that require you to "indemnify or hold harmless" your clients. If so, E&O coverage is often recommended. This coverage is also commonly recommended for any businesses providing advice related to legal or financial matters.
  • Hired & Non-Owned Auto: This insurance protects the business in the case of any incidents involving a vehicle that has been hired by the company to be used for business-related purposes. It also provides coverage in the case your business uses other vehicles which are not property of the business, such as having delivery drivers use their own vehicles. If your company hires vehicles or allows employees to use their own vehicles for business purposes, you will want to consider this insurance.

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