- Why is having plumbing insurance important?
- When is plumbing insurance a legal requirement?
- Are there reasons beyond legal requirements to have plumbing insurance?
- Is plumbing insurance ever a contractual requirement?
- Do trade associations or professional bodies require plumbing insurance?
- What types of insurance do plumbers typically need?
If you work as a plumber, whether as a sole trader, in a partnership, or as a limited company, ensuring you have the correct insurance is crucial.
The cost of being uninsured and facing a significant claim could be financially ruinous. Appropriate insurance provides peace of mind, safeguards your business, and creates a professional impression for clients, demonstrating you are a responsible and reliable plumber.
This guide answers frequently asked questions to help you understand the types of insurance you should consider for your plumbing business.
Plumbing insurance is one of the most important aspects of your business operations. In some cases, it's a legal requirement, and failing to have it can result in significant fines.
Beyond legal obligations, appropriate insurance protects your business from a wide range of unexpected and potentially devastating financial problems.
You are legally required to have employers’ liability insurance if you employ anyone. This legal obligation extends to:
- part-time staff
- trainees
- apprentices
- volunteers
- contractors, in some cases (check with your insurer if unsure).
Failure to have employers’ liability insurance when legally required can result in severe penalties, including fines of £2,500 for every day you are uninsured, and an additional £1,000 fine for not displaying the insurance certificate where employees can see it.
Even when not legally mandated, plumbing insurance provides vital protection against a multitude of risks that could financially cripple your business. Consider the potential costs if:
- You accidentally flood a client's property: Repairing flood damage can easily cost thousands or tens of thousands of pounds, covering carpets, furniture, electrical equipment, structural repairs, and more.
- Someone is injured as a result of your work: If a client or member of the public suffers bodily harm due to your actions, your business may be liable for their time off work, medical expenses, legal costs, and compensation, potentially amounting to hundreds of thousands of pounds.
- Your tools are stolen or damaged: Replacing tools out of pocket can be expensive and prevent you from working, leading to lost contracts and reputational damage.
Without insurance to cover these kinds of events, your business and personal assets could be seriously at risk if you are faced with a significant claim or loss.
Having the right insurance is frequently a prerequisite for securing contracts, especially larger or commercial projects.
Clients may insist on specific levels of cover, particularly public liability insurance, as a term of their contract.
If you cannot demonstrate you have adequate insurance, you may be unable to win projects, limiting your work opportunities and potentially damaging your professional reputation.
Membership in trade associations or professional bodies for plumbers often requires you to hold adequate insurance.
Being denied membership due to lack of insurance can negatively impact your reputation and signal to potential clients that you may not be a trustworthy or professionally sound tradesperson.
The specific types of insurance you need will depend on your individual business, but core insurance types to consider include:
- Employers’ liability insurance: Legally required if you have employees.
- Public liability insurance: To protect against claims if your work causes injury or damage to a third party or their property.
- Product liability insurance: To cover claims arising from products you supply or install (e.g., boilers, pipes) causing injury or damage.
- Professional indemnity insurance: If you provide professional advice (e.g., design specifications), this protects you against claims of negligence or errors in your advice that cause financial loss to a client.
- Tools insurance: To cover the cost of replacing stolen, lost, or damaged tools.
- Van insurance: If you use a van for your business, ensure you have appropriate commercial van insurance.
- Business interruption insurance: To cover loss of income if you are unable to work due to unforeseen circumstances (optional but can be valuable).
- Premises insurance: If you have business premises (including working from home), you may need building and contents insurance.
The fundamental insurance requirements are the same regardless of whether you operate as a sole trader, partnership, or limited company.
While the cost of insurance may vary slightly (potentially being a bit more for limited companies or partnerships), the types of cover you need to consider remain consistent. It's about the activities and risks of your plumbing business, not just the legal structure.
Employers’ liability insurance is specifically designed to protect your business from the financial impact of claims made by employees (current or former) who have suffered injury or illness as a result of working for you.
Key information for employers’ liability insurance
- Legal requirement: Mandatory if you employ anyone (as previously discussed).
- Covers employee claims: Protects you if an employee sues you for work-related injury or illness.
- Minimum cover level: Legally mandated minimum cover is £5 million.
- Protects against costs: Covers compensation payments and legal fees associated with employee claims.
Public liability insurance is crucial for protecting your business from claims if something you do (or fail to do) causes injury to a member of the public or damage to their property. This includes clients, members of the public on your worksite, or anyone affected by your plumbing activities.
Key information for public liability insurance
- Protects against third-party claims: Covers claims from members of the public, clients, etc.
- Covers injury and damage: Protects against costs arising from both personal injury and property damage.
- Contractual requirement: Often required by larger clients and trade associations.
- Typical cover levels: Commonly ranges from £2 million to £10 million, depending on your business and project types.
Product liability insurance is similar to public liability, but it specifically protects you against claims arising from products you supply, sell, or install as part of your plumbing business. This is particularly relevant if you fit boilers, pipes, fittings, or any other plumbing products.
Key information for product liability insurance
- Covers product-related claims: Protects against claims if a product you provided causes injury or damage after installation or sale, such as a faulty boiler or a pipe you fitted leaking its contents onto a client’s floors and carpets.
- Often included with public liability: Sometimes offered as an extension or included within public liability policies.
Professional indemnity insurance is relevant if you provide professional advice as part of your plumbing services. This could include advice on design, specifications, or technical aspects of plumbing installations.
If your advice is negligent, incorrect, or causes financial loss to your client, you could face a professional negligence claim.
Key information for professional indemnity insurance
- Protects against advice-related claims: Covers claims arising from negligent professional advice.
- Relevant for design & specification work: Important if you offer design services or provide technical specifications.
- Covers financial losses: Protects you if your advice leads to financial loss for your client.
- No legal minimum cover: No legally mandated minimum, but recommended levels vary based on your advisory work
Tools insurance is essential for plumbers as your tools are your livelihood. If your tools are stolen, lost, or damaged, tools insurance helps you replace them quickly so you can continue working.
Key information for tools insurance
- Covers tool replacement: Helps cover the cost of replacing tools due to theft, loss, or damage (depending on policy terms).
- Protects against downtime: Enables you to get back to work quickly after tool loss.
- Amount of cover varies: Choose a cover level appropriate to the value of your tools (often between £1,000 and £15,000, but can be higher).