Plumbing Insurance: A Guide to Protect Your Plumbing Business

What is plumbing insurance?

Plumbing insurance is a specialized type of coverage that protects your plumbing businesses from potential risks on the job, like: 

Given the nature of the industry, you may encounter situations that could lead to injuries, property damage, or other costly liabilities. You could even face legal issues. 

Some examples of risks you may face on the job that insurance would cover include:

• You slip and fall while working, leading to a serious injury that requires medical attention and time off.
• While digging to access pipes, you accidentally damage an underground gas line, leading to costly repairs.
• While installing a new sink, you accidentally crack it, resulting in replacement costs.

Whether you’re repairing leaks or installing pipes, there’s always a chance something could go wrong.

Plumber insurance typically includes a range of policies, such as general liability, workers’ compensation, and commercial property insurance.

These policies will address your unique needs as a plumbing professional. You’ll get financial protection in the event of an accident, mistake, or any unforeseen costly events.

Why plumbing insurance is important for your business

Having plumbing business insurance not only safeguards your business assets, but it also helps your credibility with clients. If you hired a contractor to work on your own home, for instance, wouldn’t you feel more comfortable knowing they’re insured?

Some customers, and especially commercial clients, will require proof of insurance before hiring you.

So, having coverage is important for several reasons:

• Protecting your business
• Securing more work
• Improving your reputation in the industry

Who needs plumbing insurance?

Whether you’re setting up a small independent business or planning to grow a larger company down the road, insurance protects your business from potential risks from the start.

New plumbing business owners

When you’re just starting your plumbing business, you’re likely focused on building a client base and establishing your brand.

However, one of the most important things you can do is get plumber insurance to protect your business from unexpected expenses. Without insurance, a single mishap could be financially devastating. It could potentially derail your business before it even has a chance to take off.

For example, imagine you’re installing new pipes in a customer’s home. A pipe bursts, flooding the room. The cost to repair the damage could be substantial. Having insurance ensures you won’t have to cover those expenses out of pocket.

Independent plumbers

If you’re an independent plumber working on your own, don’t take the risk of thinking you can get by without insurance. Even the smallest plumbing businesses face risks.

For example, let’s say a customer trips over your tools while you’re working in their home. The accident results in a trip to the hospital for the customer. Plumber insurance protects you from being liable for their medical bills.

Growing plumbing businesses

As you grow your plumbing business, your insurance coverage will need to evolve with it. Starting with the right insurance sets a strong foundation for your business, allowing you to expand with confidence.

Whether you take on larger projects—such as managing the plumbing for an entire apartment complex—or eventually hire employees, having comprehensive insurance ensures that your business is protected along the way.

Is plumber insurance required by law?

This depends on the state your business operates in and the specific nature of it. Most states require some form of plumber insurance, especially if you’re running a business that employs other workers.

Here’s a breakdown of the legal requirements:

State-specific requirements

Different states have different regulations when it comes to plumbing insurance.

For example, in states like California, you’re required to carry a surety bond as part of the licensing requirements. And in Texas, plumbing contractors need to carry general liability insurance to obtain a license.

Check the specific insurance requirements for your state to ensure your business is compliant with the law. You can find information on your state’s official government website.

Workers’ compensation insurance

If you plan to employ a team, nearly every state requires you to carry workers’ compensation insurance. This covers medical expenses and lost wages if your employees are injured while on the job.

In New York, for instance, the law requires you to provide workers’ compensation coverage for all employees, including part-time workers.

Licensing and insurance

Many states tie their business licensing directly to insurance requirements. To obtain or renew your plumbing license, you may need proper insurance.

For example, Florida requires you to carry general liability insurance as part of the licensing process.

READ MORE: What business insurance do I need?

What types of insurance do plumbers need (and what do they cover)?

As a business owner, understanding the various types of insurance will help you protect your business and obtain licensing depending on your state.

Below are the key types of plumber insurance and what they cover:

1.   General liability insurance

General liability insurance is the most basic form of coverage you’ll need. This insurance protects you from claims related to bodily injury, property damage, or personal injury that occur on your job site. Or as a result of your work.

Examples:

• You’re working on a ladder at a client’s home, and a tool accidentally falls and injures the customer.
• An employee unintentionally breaks an expensive antique while working at a client’s property.

In cases like these, plumber general liability insurance would cover the claims and any related legal costs.

Pays out to: Your customers and other people outside your company.

READ MORE: Can a company sue for a bad review?

2.   Workers compensation insurance

If you plan to have employees, most states legally require you to have workers’ compensation insurance. It provides coverage to the employee if they’re injured on the job, ensuring they receive medical care and financial support while recovering.

Coverage includes:

• Medical care and equipment
• Physical therapy
• Lost wages (disability payments)
• Family financial support in the event of a work-related death

This insurance is critical for protecting both your employees and your business. However, it doesn’t cover injuries that occur while an employee is under the influence or involved in non-work-related activities on the job.

Pays out to: Your employees.

READ MORE: 5 job safety analysis forms to share and use on jobsites

3.   Commercial auto insurance

If you or your employees drive a company vehicle, commercial auto insurance is a must. This insurance protects your business in case of accidents, covering both your vehicles and others on the road.

Coverage includes:

• Personal injury and property damage from collisions
• Medical expenses related to accidents
• Vehicle damage and theft

Commercial auto insurance can cover cars, trucks, vans, and trailers. If you eventually have a fleet, you can get a blanket policy through commercial fleet insurance.

Pays out to: Drivers and passengers affected by your vehicle damage.

4.   Professional liability insurance

Professional liability insurance gives you additional protection beyond general liability coverage. It covers claims and lawsuits related to professional mistakes.

Coverage includes:

• Errors or negligence in your work
• Failing to meet contractual obligations
• Not delivering services on time or to the required standard

While professional liability insurance doesn’t cover physical injuries or property damage, it protects your business from the financial fallout of unhappy customers and disputes.

Pays out to: Your customers.

5.   Commercial property insurance

Commercial property insurance covers damage to the physical property your business owns, leases, or rents—such as your office, storage space, and equipment.

Coverage includes:

• Fire, smoke, electrical, or weather damage
• Interior water damage (under certain conditions)
• Structural damage or building collapse
• Damage from vandalism, riots, or vehicle collisions

While this insurance is vital for protecting your assets, it typically won’t cover theft or off-site property damage.

Pays out to: Your business.