The Full Guide to Choosing the Best Plumbing Business Insurance
Plumbers need insurance, just like most tradespeople who work in one of the various types of construction and maintenance industries do.
And finding the right insurance could mean the difference between being adequately protected and facing the disaster of not being covered adequately.
But here’s the thing.
You can’t just make a list of all the different insurance features that you should look for and hope that such a list will answer all of your plumber insurance questions.
Because in order to understand how insurance benefits you as a plumber, you need to know what it does and why it’s important.
You’ll also need to know how to go about finding the right insurance for your specific business.
So in this guide, you’re going to learn everything you need to know about how to choose (and buy) the proper insurance for your plumbing company.
Let’s dive in and get to it.
The Basics: What Is Business Insurance?
Business insurance is a term used to describe specific types of insurance coverage that protect you from the unexpected costs of doing business in your industry.
This generally includes some type of general liability insurance. This type of insurance protects against accidents and natural disasters, workers’ compensation insurance for your employees, etc.
There are many types of business insurance. And usually, your business will need more than one type of insurance to legally and safely do business in your state and city.
Of course, choosing the right type of insurance for your business is crucial.
And plumbing contractors (whether the company is larger, or even if it’s just a small business operation) face some particularly unique challenges in protecting themselves from professional liability.
Plumbing accidents can cause floods, which can damage houses, businesses, and property.
Plumbing tools are also expensive, which means that equipment insurance is necessary.
Plus, every state has slightly different guidelines for how much of which types of insurance you need to have to operate a plumbing business.
It isn’t necessarily an easy area to navigate.
But in this guide, we’re going to point you in the best direction possible to solve the problem.
Why Is Business Insurance Important?
Plumbing business insurance costs aren’t necessarily cheap.
But this doesn’t mean that you should operate without the right insurance policy.
Business insurance is vital for plumbers, first and foremost, because it protects them from liability.
How Business Insurance Protects You From Liability
Without liability coverage, plumbers would be at risk of needing to personally cover the costs associated with things like accidental property damage and/or liability claims.
Depending on the incident, this could be a particularly devastating blow for any small business to face; and plumbers aren’t exempt from this danger.
You need business insurance for the same basic reason that you need commercial auto insurance if you’re operating trucks for a living.
If you damage something accidentally (or cause some type of bodily injury to someone on the job site), you need insurance so that you’re covered.
What If I’m Not Covered?
If you don’t have insurance, your company would likely be liable for all of those medical costs or damage costs.
And that could potentially put you out of business. Or worse, it could land you in the middle of a financially draining lawsuit that could plunge your already defunct company into even deeper levels of debt.
This May Sound Like ‘Doom And Gloom’ Talk, But There’s A Very Positive Silver Lining
Now, don’t worry. We’re not saying all of this to scare you.
Once you’re properly insured, you’ll be ready to do business and conduct the affairs of your trade without the need to live with the fear of having such ‘unforeseen’ and ‘unfortunate’ situations ruining your day, your business, or your life.
Being adequately insured will definitely bring you a powerful peace of mind.
The key is to make sure that you’re crossing off all of the important boxes.
What Exactly Do Plumbers Need Their Insurance To Cover?
As a general rule, plumbers need insurance to cover the following:
- A commercial general liability insurance policy
- Workers’ compensation
- Commercial auto
- A business owner’s policy
- An umbrella insurance policy (sometimes)
- Equipment coverage
- Inland marine coverage (sometimes)
Now, let’s take just a moment to talk about what all of these different types of insurance policies actually cover.
Commercial Plumbers Liability Insurance
Commercial general liability coverage is essentially an insurance policy that an insurance agency issues. It can protect plumbers against liability claims for bodily injury and property damage.
This insurance would, for example, protect the customer’s home in the event of an accident during the project so that the plumber and any subcontractors working for the company aren’t directly liable for damages, etc.
It is probably the most basic and crucial type of coverage — though this coverage is sometimes provided in a business owner’s policy.
Workers’ compensation insurance, also called ‘workers comp,’ provides wage and medical benefits to individuals who get injured or become ill at work.
Coverage in this category is mandated by each state individually.
A workers’ compensation policy is actually considered social insurance.
Businesses purchase this insurance for their employees.
Then, in exchange, the business owners are protected from civil suits if, say, an employee is injured on the job and can no longer work.
How To Find Workers’ Compensation Insurance Information By State
To learn more about exactly how workers’ compensation insurance operates in your state, just do a quick internet search for “workers compensation guide for [specific state] department of labor.”
Here’s a guide to workers comp in Colorado, provided by the Colorado Department of Labor and Employment.
Just remember that this is slightly different in each state. So when doing research, make sure to search for the state-specific department of labor websites to help you find the most accurate information possible.
Commercial auto insurance is a type of vehicle coverage that plumbers need to cover their commercial fleet of vehicles.
This isn’t so different from any type of automobile insurance.
It’s just important that you specifically buy commercial coverage since you’re operating your vehicles for business purposes.
Business Owner’s Insurance
A business owner’s policy (BOP) basically combines property and liability insurance into a package and places them both within a single policy.
This option is generally a better approach to small business insurance for small to medium-sized businesses that need an affordable yet comprehensive plumbing insurance policy.
Your insurance agent can help you determine if a BOP is the best option for your business.
But we will talk more about that in a minute.
Umbrella Insurance Policy
An umbrella insurance policy helps protect your company if a civil suit or judgment exceeds the limits of your other policies.
It provides extra coverage for:
- General liability insurance
- Commercial auto liability insurance
- Employer’s liability insurance
Umbrella insurance policies generally don’t cover claims related to:
- Commercial property insurance
- Professional liability insurance
As a plumbing company, you need your tools to help you run your business and get every job done properly.
(You know what they say: A plumber ain’t nothin’ without his tools.)
Therefore, tools that are lost or stolen from a job site (or tools that get damaged in an accident) can be costly to replace.
This is what equipment insurance helps to cover.
In the event that something happens to your tools, this insurance will empower you to replace them without needing to fork over all of that cash all over again out of pocket.
You’ve already invested in your company by buying all of this equipment once. You definitely don’t want to have to do it all over again.
Inland Marine Coverage
Inland marine insurance covers loss and damage to more expensive equipment.
As a general rule, you only need this type of coverage if your business owner’s policy or commercial package policy won’t cover your tools and/or equipment sufficiently in the event of an accident or property loss.
To understand this type of coverage on a more in-depth level, check out this article by the Insurance Information Institute.
Not every plumber will need this type of insurance. But for others, it’s an absolute necessity.
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The Full Guide: Choosing The Best Plumbing Business Insurance
We’ve talked about the different types of insurance and why they’re important.
So let’s go over a few final details and then talk specifically about how to find an insurance company and agent you can actually trust for insurance purposes.
What Plumber Insurance Covers
Understanding what needs to be covered by insurance is an essential first step to properly insuring your plumbing business.
Of course, different states also have different plumbing insurance requirements. So it’s important to do some research to figure out exactly what your insurance coverage minimums will need to be.
As a general rule, your plumbing insurance costs will need to include coverage for:
- Accidental injuries
- Property damage
- Employee wages in the event of a work-related injury
- Vehicles and equipment
- Unintentional faulty workmanship
- Legal fees
Depending on the state, you may also need to take into account coverage for things like:
- Advertising injury
- Business interruption
- Contractors insurance
- Medical bills
Unfortunately, it isn’t easy to know what exactly you’ll need as far as coverage goes in each state.
Therefore, your best bet for figuring this out is to reach out and speak to an insurance agent (or two or three) from different insurance companies you trust.
Finding A Reputable Insurance Agent
A good, reputable agent should guide you in choosing the proper types of insurance.
They can also help you meet the insurance requirements for plumbers in your area without taking advantage of you or selling you stuff that you don’t actually need.
Good providers are out there. And the best way to meet them is to ask around for a referral from other contractors who you know, like, and trust.
You can also get a free quote online. But be wary of this option for business insurance quotes.
Unless you know exactly what you need, it can be easy to get lost in the weeds when going in this direction.
Plus, a free quote will probably just lead to you getting linked up to an in-person agent anyway. So you may as well hand-choose your agent and get someone you can completely trust.
An agent can also help you with details like underwriting, exclusions, etc.
Whereas, you’ll also quickly figure out which of these agents seem to have your best interests at heart. Being able to tell those two types of agents apart is really the most important thing.
The Overarching Key To Choosing The Proper Plumber’s Insurance
The key is to get adequate coverage while still finding a policy that doesn’t require a super-high deductible.
You also want coverage that fits into your budget, is offered at a fair market price, and that comes with good customer service (i.e., it’s easy to file claims, etc.).
Plus, you only want to buy the insurance that you actually need.
You don’t need some big-shot, wide-eyed insurance agent with dollar signs in their eyes trying to sell you a bunch of expensive coverage that just isn’t necessary.
This greed is why trust is so important, especially for new small or medium-sized plumbing businesses that aren’t totally sure how to navigate this issue.
This complete guide should help you find the absolute best plumbing insurance for your business.
We love plumbers. That’s why we at Gigly are so committed to helping you find coverage that works, that serves your business, and that will do an excellent job of helping you to protect your interests.
Join Gigly to ensure you receive every benefit you deserve as a small business owner.
Now all that’s left now is to get out there, find some insurance, and then get to work!
You’ve got this. We believe in you!