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What is plumber insurance?

Working with water is risky business and things may not always flow your way. Plumber insurance is an insurance policy that protects plumbers or businesses that provide plumbing as part of their services from a number of risks inherent to the industry.

Plumber insurance is an umbrella term for a variety of coverages that offer protection for bodily injury, property damage, tool theft and more. For example, with professional liability coverage, if you install a water heater incorrectly and it leads to property damage or flooding, this policy will help cover the legal costs and any damages awarded to the homeowner.

Who needs plumber insurance?

Anyone working with pipes, water or drainage systems needs plumber insurance. Some common industry examples include:

• Master plumbers: These are plumbers with specialized training and certification who have their own businesses or work as contractors.
• Pipefitters: Also known as a steamfitter, this professional works with high-pressure pipe systems found in commercial buildings, like hospitals and schools.
• Sprinkler fitters: This trade focuses on fire suppression systems, commonly found in large buildings.
• Pipe layers: These professionals install and maintain underground piping systems for utilities, such as water and gas.
• Sanitary plumbers: These plumbers specialize in installing toilets, sinks and other sanitary fixtures.
• Gas services plumbers: These plumbers specialize in installing and repairing gas lines.

Having the right insurance not only protects you and your business from potential risks, but it also enhances credibility with clients. Some clients may even require proof of insurance before hiring a plumber.

What does plumber insurance cover?

Professional liability insurance: Also known as errors and omissions (E&O) insurance, this protects against claims of professional mistakes or negligence. For example, if you're hired to repair a plumbing system in a residential complex and weeks later a missed leak causes water damage that leads to the homeowner filing a claim for costs and damage, professional liability insurance will cover legal fees and compensation, protecting your business.

Commercial general liability insurance (CGL): Essential for all plumbers, this insurance provides financial protection against lawsuits for third-party property damage or bodily injury. For example, let's say you’re installing plumbing in a commercial building and you accidentally drop a heavy tool that leaves a crack in the floor. If the building manager files a claim for the repair costs, commercial general liability insurance will cover the cost of the property damage and any associated legal fees.

Tools and equipment insurance: Also known as plumbing equipment insurance, this covers the repair or replacement costs if your tools or equipment are lost, stolen or damaged. Items that are valued over $1,500 are considered equipment, while items valued below $1,500 are considered tools.

What insurance add-ons are recommended for plumbers?

Commercial property insurance: This insurance protects your business from financial losses due to damage to physical assets like buildings, offices and equipment. For plumbers, it covers your essential tools and machinery. For instance, if a fire breaks out and damages your warehouse and equipment, commercial property insurance will cover the repair or replacement costs.

Commercial auto insurance: This insurance covers your work vehicles in case of accidents, theft or damage. For example, if your company van is involved in an accident, commercial auto insurance will cover the cost of vehicle repair. This type of coverage is mandatory if you use a vehicle for your business, even if that vehicle doubles for personal use.

Business interruption insurance: This insurance protects your business from lost income due to unexpected disruptions like natural disasters or fires. If disaster strikes and you need to temporarily shut down your operations for repairs, this type of insurance will cover your lost revenue and ongoing expenses.

How much does plumber insurance cost in Canada?

The cost of plumber insurance in Canada can vary significantly based on several factors. On average, a plumber may expect to pay anywhere from $500 to $3,500 per year for a comprehensive policy. A rough breakdown of costs for a typical plumber insurance policy is as follows:

Commercial general liability insurance for plumbers: Typically starts at around $600 to $700 per year for a $2 million coverage limit.

Monthly costs: Can be approximately $60 per month for basic coverage.

Small plumbing business: Premiums can start from as low as $750 per year for businesses without a physical office or company vehicles.

Keep in mind that the cost of plumber insurance varies widely from business to business. While the numbers provided above reflect typical costs, they may not reflect accurate approximations for your own plumbing business. To see how much plumber insurance will cost for your business, you'll need to get a quote.

What factors determine the cost of plumber insurance rates?

Several factors increase or decrease the cost of plumber insurance rates, including:

• Type and size of your business: If you run a large plumbing company with 50 employees, you will pay significantly more for insurance than a small business with just a few employees.
• Your location: Operating in a high-claim area, like a city prone to flooding, can result in higher premiums for your plumbing business than if you were in a low-risk rural area.
• Your claims history: If you've made multiple claims in the past three years, you can expect your premiums to rise sharply as a result.
• Coverage limits and deductibles: Where you set your coverage limits and deductibles matters. For example, choosing a policy with a $1 million coverage limit and a $500 deductible will likely lead to higher premiums than opting for a $100,000 limit with a $2,000 deductible.
• Your experience and training: As an experienced plumber with several certifications, you may qualify for discounted rates, while an entry-level plumber might not enjoy the same benefits.

How does plumber insurance work?

Plumber insurance works on a simple principle: you pay premiums to receive coverage against specific risks. If you need to make a claim, your insurance provider will evaluate the situation and decide your compensation based on your policy's terms. To ensure a hassle-free claims process, it's important for you to keep accurate records of your work and any incidents.

How to get the cheapest plumber insurance quote

To find the cheapest plumber insurance quote, follow these steps:

Limited coverage: Purchase just the coverage you need. If your business doesn’t operate any company vehicles, you can lower your quote by not including commercial auto insurance.

Shop around: Always compare quotes from several insurance providers.

Bundle policies: Think about combining services, like adding plumber insurance to your general liability policy. This could lead to a discount, potentially saving you 10-15% overall.

Increase deductibles: Choosing a higher deductible, like $2,500 instead of $1,000, can significantly reduce your monthly premium. Just make sure you can comfortably cover that deductible if you need to file a claim in case of emergencies.

Maintain a good claims record: Keeping a clean claims history will help you find better rates and save money on your premiums.