Plumbing Contractors: Here’s What Insurance You Need in Canada

Plumbing is an essential, but risky trade. From burst pipes causing property damage to injuries on job sites and exposure to potentially hazardous chemicals, plumbing work comes with a unique set of challenges. But having the right insurance in place can prevent things like lawsuits and accidents from derailing your business.

Here are four essential types of insurance every plumbing contractor should consider.

Commercial general liability insurance (CGL)

CGL insurance is essential for plumbing contractors. This coverage protects your business if your work causes property damage or bodily injury to others. For example, imagine you’re installing a walk-in shower and you accidentally damage your customer’s expensive floor tiling in the process. CGL insurance would cover the repair or replacement costs of that property damage, shielding you from expensive out-of-pocket expenses. Similarly, if a customer is hurt tripping over your tools, CGL helps cover their medical bills and any legal fees if a lawsuit is filed.

Tools and equipment insurance

From wrenches and power tools to pipe inspection cameras and industrial pumps, you can look to tools and equipment insurance to cover theft, loss, and damage. For instance, if your equipment is stolen from a job site or your work truck, this insurance will help pay the replacement cost. This coverage is particularly critical for plumbers working in high-risk areas or with specialized, high-value tools.

Commercial auto insurance

Plumbers rely on their vehicles to get to and from job sites. Personal auto insurance typically won’t cover job-related vehicle use. Instead, you need commercial auto insurance that will cover accidents, property damage and liability claims that occur while you’re driving for work. This also extends to trucks, vans and trailers you use to haul equipment.

A typical commercial auto policy can include some or all of the following coverages:

• Third-party liability: This protects your business if you’re at fault for an auto accident that causes damage to another vehicle or bodily injury.
• Accident benefits: This covers the medical and rehabilitation bills of injured parties if one of your vehicles is involved in an incident, whether you’re at fault or not. (This does not apply in Québec, where all drivers are covered by Québec’s public automobile insurance plan. The provincial plan includes no-fault coverage for bodily injury or death as a result of an accident.)
• Additional coverage: You have many options to enhance your commercial auto protection. For example, you can buy extra third-party liability, collision or upset coverage; comprehensive coverage; or coverage for specified perils not included in your primary policy.

Remember that provinces with government-operated auto insurance systems, like British Columbia  and Manitoba, may have different rules for insuring work vehicles. A broker familiar with provincial laws can guide you through the insurance requirements in your area.

Errors and omissions insurance (E&O)

Even the best plumbers can make mistakes. Errors and omissions insurance, also called professional liability insurance, can protect your finances if a customer claims your work caused bodily harm or property damage. For example, if a newly installed water pipe bursts due to improper sealing and causes extensive water damage to your client’s property, E&O coverage can help with legal costs and damage compensation.

Additional coverage options

Everyone’s plumbing business is different. Depending on your services and operations, you may need additional insurance policies, such as:

• Pollution liability insurance: This is critical if you work with waste disposal or water systems. It covers liabilities resulting from pollution-related accidents.
• Surety bonds: These bonds protect clients from financial losses due to incomplete or poor workmanship. In some provinces, like Québec, plumbers are required to have surety bonds as part of their licensing or if they want to perform certain types of work, like government contracts or large-scale projects.
• Workers’ compensation insurance: This is almost always required if you have employees. It helps employees injured on the job by providing wage-loss benefits, medical coverage and support to help them return to work. If you have employees, you need to register with your provincial workers’ compensation board.

No matter how careful you are, accidents can happen. Insurance tailored for plumbers and plumbing contractors is your best defense against costly setbacks. Consult an insurance broker to create a policy package that fits your plumbing business’s needs.