Plumbing businesses need coverage for water damage liability, employee injuries, vehicle accidents and equipment theft. Below are the six essential insurance types for plumbing contractors with recommended coverage amounts.
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What Insurance Do You Need For a Plumbing Business?
Required business insurance for plumbing businesses includes general liability, workers' comp, commercial auto and professional liability.
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Updated: November 17, 2025
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Plumbing Business Insurance Requirements: Key Takeaways
General liability insurance is the most critical coverage for plumbing businesses due to frequent water damage claims and commercial client requirements. (Read More)
Plumbing businesses require workers' compensation, commercial auto insurance and license bonds mandated by state law or client contracts. (Read More)
Optional coverage plumbing businesses should get includes professional liability, tools and equipment insurance and pollution liability.
To meet requirements, request certificates of insurance, verify coverage matches contract terms and submit COIs to clients and licensing boards. (Read More)
What Insurance Types Are Needed For a Plumbing Business?
Property damage and bodily injury claims from your plumbing work, like flooding from installation errors or clients injured by equipment on-site. | $1 million to $2 million per occurrence or $2 million to $3 million aggregate to satisfy client contracts. | A plumber improperly tightened a water heater connection, causing an overnight leak that flooded a home. Damage totaled $41,500 for flooring, drywall and furniture, plus $5,500 in legal fees—all covered by general liability insurance. | |
Medical bills and lost wages for job-related injuries like burns from hot pipes, back strains from lifting fixtures or slips on wet floors. Required by law in most states once you hire employees. | Coverage amounts set by your state based on payroll and industry classification. | A plumber slipped while carrying a cast iron bathtub, severely injuring his back and shoulder. Workers' comp covered $64,000 in medical bills and $28,000 in lost wages during his four-month recovery. | |
Work trucks and vans used to transport plumbers, tools and materials to job sites. Required by law in 49 states for business vehicles. | $1 million combined single limit recommended to meet state law and client requirements. | A plumbing van was rear-ended, causing a chain reaction collision with $28,000 in medical bills, $34,000 in vehicle costs and $7,500 in damaged tools. Commercial auto covered the full $69,500 with a $1,000 deductible. | |
Claims when clients say your work was done incorrectly, even if nothing breaks right away—like pipes installed to wrong specifications or missed code requirements. | $1 million per claim coverage for most plumbing contractors. | A plumber miscalculated water line sizes for a new restaurant, causing inadequate pressure that delayed opening for six weeks. Professional liability paid the $107,000 settlement for lost revenue and re-piping costs, plus legal bills. | |
Specialized plumbing equipment like pipe threading machines, drain cameras and hydro-jetters from theft, damage or loss on job sites or in transit. | $15,000 to $30,000 based on your tool inventory value. | Thieves stole $10,400 in equipment from a work van, including a pipe threading machine, drain camera and hand tools. Tools and equipment insurance reimbursed the full amount within five days, preventing a three-day work stoppage. | |
Pollution Liability Insurance | Costs from accidental sewage backups, fuel spills or hazardous material releases during plumbing work. Required by many commercial clients and municipalities for sewer and septic work. | $1 million to $2 million for sewer line work, septic systems or industrial plumbing projects. | A plumber's excavator ruptured an underground fuel tank while replacing a sewer line, contaminating soil and groundwater. Pollution liability covered $199,000 in cleanup costs, consultant fees and regulatory fines. |
Plumbing Business Insurance Requirements
State laws and commercial contracts mandate specific insurance coverage for plumbing businesses. Requirements vary by state, business size and project type, so verify your state's licensing board requirements and review each client contract carefully.
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Workers' Compensation Insurance | Required by law in most states once you hire employees, with penalties including fines up to $10,000 per employee, criminal charges and license suspension. Florida requires coverage within 30 days of license issuance, while other states mandate it immediately upon hiring your first worker. | Coverage amounts are set by your state based on payroll and industry classification. Plumbers pay an average of $195 monthly or $2,337 annually, with rates varying by state. |
Commercial Auto Insurance | Required by law in 49 states for business-owned vehicles, as personal auto policies exclude commercial use. Plumbing businesses use work vehicles daily to transport tools and materials, making commercial coverage legally mandatory. | State minimums range from 25/50/10 to 30/60/25 split liability limits. Most plumbers carry $1 million combined single limit to satisfy state law and client contracts. |
General Liability Insurance | Commercial clients almost always require general liability before work begins, and property managers demand certificates for facility access. Florida requires $100,000 for bodily injury and $25,000 for property damage to maintain plumbing licenses. | The industry standard is $1 million per occurrence and $2 million aggregate. High-value commercial clients may require $2 million to $5 million with additional insured endorsements. |
License Bonds | Many states require plumbing contractors to carry license bonds to legally operate and maintain licensure. Florida requires contractors with credit scores below 660 to post $20,000 bonds for Division I and $10,000 for Division II. | Bond amounts vary: California requires $15,000, Washington $6,000, Minnesota $25,000 and Illinois $20,000. Iowa requires a minimum $5,000 bond for plumbing contractors. |
Professional Liability Insurance | Commercial clients like hospitals and office complexes require proof of coverage before hiring plumbers. Design-build projects and new construction commonly mandate errors and omissions coverage due to code compliance risks. | Most commercial contracts require $1 million per claim and $2 million aggregate. Large projects exceeding $500,000 may require $2 million to $3 million depending on scope. |
Performance and Payment Bonds | Government contracts require performance bonds guaranteeing completion and payment bonds ensuring subcontractors get paid. Large commercial plumbing projects typically exceeding $100,000 require these bonds to protect owners from contractor default. | Performance bonds equal 50% to 100% of contract value. Payment bonds usually match performance amounts, with combined capacity ranging from $250,000 to several million. |
Commercial Property Insurance | Landlords require coverage if you lease shop space or warehouse facilities. Lenders mandate commercial property insurance if you finance your building, protecting their investment in the property. | Required coverage is based on building and contents replacement cost, ranging from $100,000 to $500,000. Landlords specify limits in leases while lenders require amounts matching loan value. |
How To Ensure Plumbing Business Insurance Requirements Are Met
Meeting insurance requirements involves more than purchasing policies. You’ll need to prove coverage and maintain compliance for clients, licensing boards and state authorities. Follow these steps to satisfy plumbing business insurance requirements and avoid coverage gaps.
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- 1Request Certificates of Insurance (COI) from your insurer
Contact your insurance provider immediately after purchasing policies to request Certificates of Insurance for general liability, workers' comp, commercial auto and any license bonds. Most insurers deliver COIs within minutes to hours via email, allowing you to bid on commercial plumbing jobs or start work at properties requiring proof of coverage.
- 2Verify your coverage meets contract and licensing requirements
Review each COI against your state's plumbing license requirements and specific client contract terms before submitting them. Confirm your general liability shows $1 million/$2 million limits for commercial work, your license bond matches your state's amount (ranging from $5,000 to $25,000), and any required endorsements like completed operations coverage appear on the certificate.
- 3Submit COIs to property managers, general contractors and licensing boards
Provide certificates to commercial property managers before servicing their buildings, to general contractors before starting work on construction sites, and to your state plumbing board during license applications or renewals. Municipal building departments often require COIs before issuing permits for major plumbing installations like water heater replacements, sewer line work or gas line installations.
- 4Update insurance documentation for long-term projects and renewals
Set calendar reminders 60 days before policy renewals to request updated COIs, especially if you're working on multi-month commercial projects where expired coverage could halt work. Proactively send renewed certificates to property management companies with annual service contracts, general contractors on active job sites, and your state licensing board to maintain continuous compliance without work interruptions.
Get Business Insurance You Need For Your Plumbing Business
You can get matched to plumbing business insurers using our tool below, which connects you with providers experienced in contractor coverage. Compare quotes from multiple insurers, research plumbing insurance costs and verify providers understand coverage needs like water damage liability, completed operations and equipment protection.
Get Matched To The Best Plumbing Business Insurer For Your Needs
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About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
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