Every industry has its own unique relationship with insurance agencies. At the same time, industries such as plumbing and construction have similar insurance models due to higher risks of worker injuries. Here’s a look at what you need to know to get the right insurance for your plumbing business.
Types of Insurance Coverage Plumbers Need
A basic plumbing contractors insurance policy encompasses coverage for general liability and add-ons. A business owners policy (BOP) usually covers the essentials for companies with less than 100 employees. It also covers data breaches, equipment problems, and loss of income for employees due to accidents and disasters. Meanwhile, an umbrella insurance policy delivers a broader customized coverage. The core elements of general liability coverage are:
- Pays for repairs of damage caused by your company
- Covers physical injuries sustained by customers at your establishment
- Delivers financial protection in the event of plumbing work complaints
A plumbing company must protect its equipment and business location, just as it must be prepared to pay for accidents that affect customers. While umbrella policies offer broad coverage, you may still need additional customized coverage depending on how you operate your business. A plumbing company that employs hundreds will need a much more complex insurance plan than a small firm.
Professional Plumbers Liability Insurance
The reason to buy professional plumbers liability insurance is to protect your business in the event of errors on the job that can lead to lawsuits, rework, or additional costs. It covers instances such as taking the wrong advice, unfinished work, and alleged or actual negligence. However, it doesn’t cover acts of intentional damage. This coverage may also be applied to cases where the client says the work is unsatisfactory or a plumbing company misrepresents its professional services or skills.
This coverage provides a safety net if your company ever faces a lawsuit based on errors. It pays for legal fees, so you don’t have to dip into your own resources. Keep in mind that it only covers damage claims against your company and does not include damage caused by subcontractors. That’s why it’s important to work with subcontractors who can prove they carry their own liability insurance.
Benefits of Umbrella Liability Insurance
General liability policies may only cover so much of a lawsuit. Some plumbing lawsuits can be massive, affecting dozens of people. Since it is unlikely that a general plan will cover expensive legal costs for long-term cases, high-risk businesses should buy umbrella liability insurance that provides coverage for unnecessary legal expenses. Find out the right level of coverage you need by discussing your business operations with a plumbing insurance expert.
Insuring Your Plumbing Equipment
All plumbing companies need to insure the equipment and tools that are required to do professional work. If any of the tools suddenly go missing or are stolen, you can get the funds from your insurer to replace them, provided you carry equipment insurance for specific items. Normal wear and tear, however, is not covered. This coverage can be added to the plumber’s liability insurance or BOP. It is important to note that different insurers offer different versions of these policies and add-ons.
You may have heard of inland marine insurance as a solution for certain businesses. It is often carried by companies that ship expensive equipment or products. Insurance in this sense contributes to business continuity, as you won’t have to worry about lower productivity due to equipment downtime.
Commercial Auto Insurance
Commercial auto insurance is a different type of plan that your company will need since professional plumbers use vehicles to reach worksite destinations. This coverage is usually one of the few state government-mandated requirements. Commercial auto insurance provides coverage for the following:
- Collision damage to vehicles owned by others
- Property damage caused by one of your drivers
- Medical bills for treatment and medicine for injured victims
- Loss from theft or vandalism
Who Needs Surety Bonds?
Surety bonds are like an alternative to traditional insurance policies without actually being insurance policies. Commonly required by state and local jurisdictions, surety bonds assure customers that the work will be done according to professional standards. A surety bond involves the following parties:
- Obligee who requires the bond
- Surety (the bonding company issuing the bond, guaranteeing the work)
- Principal or contractor
Unlike insurance claims, with surety bonds, you repay the surety company once customers win their claims. Bonds function as guarantees that homeowners and business owners can count on for professional work. They serve as financial protection for the party contracting the work. If the work doesn’t meet professional standards, the owner is not required to pay.
Cost of Insurance for Plumbers
Determining all your plumbing insurance costs can be complicated, which is why some companies choose to bundle all their insurance coverage together. Bundling helps lower costs and strengthens B2B relationships with insurers. Here are key factors that affect insurance rates for plumbers:
- Worksite data such as location and size
- Size of the company in terms of revenue and number of employees
- Quality of technical knowledge, skills, and experience
- Overall insurance coverage strategy
Extra Protection with Plumbing Software
Investing in the right business management software is key to protecting your business beyond insurance. Software platforms for managing equipment and tool inventory are particularly useful for plumbers to keep track of their assets.
All plumbers need to invest in some form of plumbing contractors insurance. It’s essential for plumbers to understand their insurance policies and options. Contact us at Artisan Insurance Solutions for more information about the right plumbing insurance plan for your business.