Plumbing Insurance Facts:

  • Plumbing Insurance is more expensive than most common trades
  • Insurers are increasing excesses on water damage claims
  • Some insurers avoiding plumbers by restrictive coverage and exclusions
  • High & fluctuating prices – risk of getting overcharged is too much!

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We’ve come across Plumbers who have been insured with one insurer for years not knowing that their business activity is not covered by their insurer.

Fortunately they haven’t had to make a claim otherwise this would be an expensive lesson to learn.

A common exclusion is height restriction (2-storey limit) that many insurers have put. It can be easily avoided if you know the right insurers.

Don’t make the same mistake as many others people have. We can help!

Getting insurance with CoverTradie is as easy as…1,2,3

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Things to consider when getting Plumbing Business Insurance.

Often the first thing we hear on the phone when talking to tradie clients is that “I have decided to start my own business, what insurances do plumbers need?”

If this is also a question in your mind since you are starting out your new business or you have been going for a while but just want to make sure you have ticked all the boxes, then you’ve come to the right place. Small business insurance for plumbers has had many confused in the past, we are here to help you.

It covers quite a bit of information that any small business would benefit from. If however you are a large business, established for many years and you are doing complex things, we’d be happy to get on the phone to explain things specific to your needs.

The things we discuss below are:

What is Plumbing Insurance?

Many plumbers that we speak with are often looking for “Plumbing Insurance”, they usually mean Public Liability Insurance. The reality is that there’s no such thing as Plumbing Insurance.

No insurer makes “Plumbing Insurance”. Insurers do Public Liability Insurance and Plumbing is an occupation that they chose to insure or not.

Plumbing Insurance is just a general term that has been used in the trades circles for a while and people have gotten used to being spoken frequently.

For a non-technical person who’s not from the insurance industry, it might be okay to address Public Liability Insurance as Plumbing Insurance but here at CoverTradie, our definition is a bit broader than just the Public Liability Insurance because a there are a range of risks that a Plumbing Business faces, see below:

The definition for Plumbing Insurance should be managing all the risks faced by a Plumbing Business not just their Public Liability Risk.

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Risks for someone running a Plumbing Business

People who run businesses do a pretty impressive job of adding value to the society, with their skill they create employment opportunities for others and generate cashflow in the economy which leads to a prosperous society.

The biggest risk you take in life is not take a risk.

Anonymous

In the process of doing so, they take risks of various types. They put their financial savings on the line in hope that they’d be able to drive a bigger return on their investment in future. They put their faith in others to help them achieve their goals.

People often put their health and safety on the line as from your own personal experience you’d know how many people have been affected due to workplace injuries and illnesses.

Long story short, they take a lot of risks and these are some of the risks we discuss here:

Personal Risks

Trades and construction have THE HIGHEST rates of workplace injury out of all occupation groups in Australia. See table below:

https://www.abs.gov.au/statistics/labour/earnings-and-work-hours/work-related-injuries/2017-18

It’s hard to argue with data even though many might feel that their personal risk is low. No matter how low your assessment of risk is, there are some things that tradespeople do that office people don’t which drives up the injury risk, like:

  • Lifting heavy stuff
  • Keeling for long periods
  • Using tools which can result in cuts & burns
  • Climbing ladders, getting on roofs – risks of falls etc.
  • Exposure to dust, asbestos – can result in some serious dust diseases etc.

From the chart above, it’s clear that Trades people face a greater risk of injury than any other group, yet many don’t have adequate insurance, whether workers compensation because they are a sole trader and haven’t registered or Personal Accident cover because they think nothing will happen to them. Not a great strategy for success in life.

https://www.worksafe.vic.gov.au/crystalline-silica

Now injuries are not just restricted to workplace either, injuries happen outside of work too. Even if you were covered under your state/territory workers compensation scheme, any injury that is not work related may not be covered.

We have a friend and tradie client who is an avid mountain cyclist. He has crashed a few times with resulting fractures preventing him from doing any work for like weeks at a time.

It’s not that he’s got access to sick leave and can rely on his employer if something goes wrong in future. When he’s not working, he’s not getting paid.

Having the right insurance is important even more so if you have family who’s future is dependent on you bringing the income.

You may also have business debts that have a monthly repayment that won’t disappear automatically. The repayments for vehicles, rent, mortgages etc. all needs paying. Income Protection insurance for Plumbers is very important!

Income Protection Insurance For Plumbers is a must.

Personal risks are significant and they need to be managed with the right insurance that can replace your income whilst you recover should there be an injury or illness that takes you down.

The insurance that we use to manage this risk is Personal Accident & Sickness Insurance. Income protection insurance cost starts from $50 per month. It costs like less than a cup of coffee a day yet many would easily spend money on 3 cups of barista coffee. It’s a no brainer in our view point.

Personal Accident & Sickness Insurance

Trades people should also consider Life Insurance and income protection can be obtained via that channel also. That insurance is done by Financial Planners or specialist Life Insurance brokers.

Business Risk

Asset Risk

Asset risk is easier to perceive than other types of risks. At least you have something tangible like your van, ute, excavator or tools that give us a perspective that this asset is at risk of a loss.

They all cost money and perhaps you have borrowed some of that money to get your hands on those assets via a bank loan, which needs adequate protection.

  • Vehicle can be in an accident or be stolen
  • Tools can be stolen, tool boxes have been jimmy opened
  • Tools can be accidentally damaged
  • Stock can be damaged in a factory/warehouse fire event

They all need to be managed and below we list some key insurances to manage those risks.

Commercial Vehicle Insurance

The single most frequent source of claims for the insurance industry is motor vehicles insurance.

For every 100 vehicles insured, about 15 end up making a claim. That’s on average, but different customer groups have a different probability of making a claim.

Young and inexperienced drivers under the age of 21 have a much higher frequency of claims, like a 25% probability or 1 in 4 chances.

When they do have an accident, they also smash big time. The damage done is much greater. The cost of insuring younger drivers is much higher.

Vehicles that do a lot of mileage within metropolitan areas tend to have higher chance of accident. You see, more time on the road within more crowded spaces can result in greater chances of an accident.

Mileage done on open country roads is different to mileage done on inner city suburbs.

People who are stressed and time pressed also tend to have a greater chance of being in an accident because mistakes happen when you are stressed.

A combination of all of the above makes Tradespeople a greater risk compared to other drivers, and it’s very clearly seen in the insurance data.

Insurers know that time pressed tradies running from one job to another, spending significant time in peak hour traffic have caused some significant insurance losses.

The insurers price this insurance accordingly, which is HIGH. Apart from making sure that we find you the right insurer there are some other important things to consider, that we always do. Make sure that:

  • Vehicle is listed as “Tradesman Use” not “Private Use”
  • Vehicles are insured on agreed value (More certainty)
  • Accessories and modifications are included in the insured value – we know how proud tradies are about their accessories, see image below
  • Cost of sign writing is included in insured value
  • List the drivers on the policy because there’s often higher excess that may apply for unlisted drivers
Source: www.caddystorage.com.au

Tools Insurance or General Property Insurance

There’s always a hidden fear that some crazy person is going to steal your favourite cordless drill. That’s if you get lucky. The unlucky ones have had the entire tool boxes stolen even from worksites where they have been kept securely locked.

No matter what size tradie business you run, whether its a “man with a van” or a large business with a fleet of multiple vans, tool theft has affected many.

Insurers are becoming more and more averse to doing standalone tools insurance cover for that very reason. They don’t make that much money at all if anything, they lose money on Tools Insurance.

We notice that now days tools insurance is offered more as add-on product to public liability insurance only.

There are some insurers who do standalone cover, they charge top dollars for it though.

Small business Plumbers take up $5000-$10,000 worth of Tools Insurance cover, your needs could be different depending on the scale of your work.

Property Insurance

Do you operate from your home like many do or do you have a factory warehouse? Is there a level of stock you maintain? Do you own the factory that needs protection from fire, storm and natural perils?

All of that needs to be protected. If you operate from home, the stock is not covered under your contents insurance. Business contents and stock need to covered under Business Property Insurance.

Liability Risks

Liability risks, as the name suggests arise where you have been found liable for someone’s loss. This loss could be to their property, i.e. you did some plumbing work that failed. Fluids escaped causing a whole heap of damage resulting in you being found liable for the losses.

It could also be a liability for causing an injury to someone or causing their death. An example where you’ve done some repairs to the home of an elderly and frail granny. As you’ve finished the job and putting your tools back in the van, she’s tripped over something that you haven’t picked up yet.

She’s got a broken elbow that needs urgent medical treatment and her insurer recovers the damages from your insurer.

Public Liability Insurance

This is the insurance everyone has to have to be a complaint Plumbing business. Regulatory bodies require to have a minimum of $5 Million cover. They don’t enforce that you manage your asset risk, because at the end of the day it’s your decision whether to insure your tools or not but they want to ensure that risks to general public etc. are covered that may arise out of your work.

As a plumber the minimum insurance coverage you require is $5 million liability cover.

In this section, we go over if there are any specific state level insurance requirements for you to be a compliant plumber, some claim examples, any specific exclusions that you need to consider and the type of work you are picking up. The pricing estimates are also discussed.

How insurers assess your risk?

If you haven’t had the experience yet then soon you will when you try to get Public Liability Insurance. You’d be asked to provide some information about your business, what your occupation is, your location, the estimated turnover for next 12 months and the types of jobs you are likely to pick (commercial, domestic or industrial).

Most likely you will be asked to complete a form, if not upfront then just before a policy is locked in a broker might require you the sign a declaration confirming that the information provided is true based on which the insurer can make an informed decision on whether to offer you cover or not and if they do at what rates and conditions.

Plumbing generates a high volume of claims, some of that can be due to poor workmanship or not paying attention to what could cause a loss to somebody, but reality is, you deal with fluids and there are chances that fluids will escape which result in damages and claims.

Domestic, Commercial or Industrial Work

Insurers are very particular about what type of work you do. They see a plumber predominantly serving domestic customers as a different risk compared to someone doing industrial work.

And they want to know that information, here’s an example below we took from a form that we completed:

You might also be asked if you store or handle any hazardous substances. Do yo discharge waste or any hazardous material into sewers etc.

That’s really the underwriters trying to gauge what is the type of risk they are going to cover. Based on that information they want to determine what is the right price to cover the risk if at all they want to cover it.

Exclusions & Conditions

Once they decide to offer you cover, they might want to put a bunch of exclusions and conditions on your policy. A common example is the 2-storey height limit. Often policies like these can be a little cheap.

What it means though is that if one day you have to fix a tap in a 3-storey building to support a property manager in the middle of the night (urgent matter) and something happened afterward, then you are uninsured. Hopefully the insurer will understand the special circumstances but then they may not. This is really done by insurers who are not serious about insuring plumbers. We stay away from them, when they themselves are not confident about their ability to understand risk and offer proper cover, what hope does the customer have from them about stability of premiums.

Insurers may also put some conditions on your policy. Like this, a very common one:

Underground services exclusion: They want to make sure that you “Dial before you dig”. This exclusion means that if you don’t check the underground services prior to digging, your claim may be declined. Not a huge problem, smart tradies always do that anyway. Make a phone call, take down the details of the person you spoke to.

Or an exclusion like this, which is pretty specific to a particular type of risk. This become quite relevant for your broker to understand the type of work you do. Here the insurer doesn’t want you to do any welding work at abattoirs or cold stores. This usually happens when in the past insurer has suffered a large loss or a series of losses that makes them very risk averse to certain types of works.

And then there are more conditions, like this one:

Welding and Hot Work Limitation, really wanting you to make sure hot works are done 100% in compliance with the Australian Standards.

Special Excess

Long story short on exclusions and conditions, you or your broker needs to make sure they fully understand these. They are small things but really important to keep an eye on and understand them better because if you don’t they can easily become big problems.

You can leave it to us as with our experience we can optimise the entire process of getting Plumbing Insurance for Contractors way more efficiently compared to if you were trying to do it your self and perhaps going with a mindset to get cheap business insurance for plumbers.

Plumbers Public Liability Insurance Cost

One of the most important pieces of the puzzle to get the right Plumbers Insurance is the knowledge of market prices. The premiums that insurers put in the market to attract you as their customer whilst at the same time hoping their premiums are reflective of the risk they take and their own profit margin.

Insurers kind of keep an eye on what their competitors are charging however they may not have the same visibility of the prevailing prices in the market as the brokers do.

For every customer we talk to, we shop around 6-8 insurers to really narrow down who is going to offer the best premium/coverage combination for the needs of our customers

As a result of this activity, we get to see a lot or premiums. Some insurers offer really attractive prices, others may by rip-off, knowingly or unknowingly. This variation in pricing happens in every state. This table is a good example:

StateGood PriceAverageRipOff
QLD $          604 $          898 $       1,103
SA $          629 $          868 $       1,085
WA $          667 $          873 $       1,075
NSW $          741 $       1,072 $       1,387
VIC $       1,242 $       1,682 $       2,118
Premiums for $5 Million public liability insurance for plumbing business with turnover of $100,000.

Why on earth would you ever pay the RipOff premiums or for that matter average also if someone can find you a bargain price for an insurance which is same across insurers.

We love to spot these gaps in the prices offered by insurers to benefit our clients in a small way which creates the business conditions for the clients to be able to create value, which has a long term benefit to the society. Secretly, sometimes we call ourselves the Plumbing Insurance money saving expert.

Mind you the premiums paid by Plumbers are the highest among common trades. You would have heard about this from your tradie mates and perhaps come to accept this fact that plumbing insurance is expensive and that is something you have to live with.

That may be true for the overall market, there is no reason to accept premiums that are rip-off or even mid-market. The goal of all businesses is to save costs and we help you do that by helping you find the bargain prices in the market.

Let us share some insights into what we have seen in the market.

As we have said earlier, Plumbers pay more than any other common trade in the market, here’s a simple comparison chart that shows the bargain premiums offered we’ve seen for small businesses with turnover of $100,000 on a $5 Million public liability insurance limit.

Plumbers pay more for their insurance than other common trades

It doesn’t matter whether the limit of liability is $5 Million, $10 Million or $20 Million, you end up with the same outcomes. Plumbers Public Liability Insurance is more expensive than other common trades.

Turnover & Business size have an impact on your insurance

As you can imagine, bigger the business, more the chances of something untoward happening,Touchwood. We mean events and mistakes that end up generating a claim to be made.

This often happens when the businesses transition from a single operator to taking on new staff/apprentices. During that early phase of growth, many tradies have their attention stretched a bit much, on things like business growth, their accounts and tax, their staff and of course their families.

It’s during that time when you haven’t yet put in all the checks, balances and controls in place is when the mistakes happen. Like an untrained apprentice, not knowingly drags out dishwasher damaging the floor boards at your job site.

The chart below shows how premium increases steadily as the business turnover increases.

Victoria leads for title of “Most Expensive Plumbing Insurance”

Public Liability Insurance for Plumbers is most expensive in Victoria. The chart below shows that the premium even for the smallest of businesses on the low limit of $5 Million coverage can almost be double than what someone in Queensland would pay.

That was just a high level insights into the price of Plumbers Public Liability Insurance across Australia but what happens at a state level that creates this difference. Why is Plumbers Insurance in Victoria so much more expensive compared to other states?

Victoria

Insurance Compliance Requirements

The reason why Plumbers’ Insurance in Victoria is so expensive is because of the consumer protection legislation as part of the Victorian Plumbers Warranty Insurance Scheme.

In Victoria to be compliant your policy should include consumer protection liability and display a wording similar to the one below on your policy schedule. If it’s not there, then you need to speak to your broker or insurer to find out why it isn’t there or if it’s hidden somewhere in the paperwork.

You require a minimum of $5 Million Legal liability cover along with consumer protection liability cover. It’s an easy thing to do for us, usually just flick of button when we are submitting your forms to the insurers.

You can read about the VBA requirements by following the link below.

https://www.vba.vic.gov.au/plumbing/renewals-other-requirements/plumbing-insurance

Prices

As for pricing, if you are just starting off, the below table should be able to give you an indication of good prices vs rip-off prices by different liability limits in Victoria for a business with turnover of $100,000.

LimitGood PriceAverageRipOff
$5 Million $       1,242 $       1,682 $       2,118
$10 Million $       1,605 $       2,004 $       2,416
$20 Million $       1,980 $       2,283 $       2,750
Prices for small business with a turnover of $100,000.

This is a very high level information into prices that we have observed, if you are a Victorian plumber who want to understand a bit more, please read this article – Plumbers Insurance Victoria.

NSW

Insurance Compliance Requirements

New South Wales doesn’t require Consumer Protection Insurance built into a Plumber’s Liability Insurance. They require that tradespeople working on home building projects greater than $20,000 are required to have Home Building Compensation Insurance. More details can be read here.

Prices

NSW isn’t too bad when comparing prices to Victoria. You can still get Public Liability Insurance for under $68 per month for a start-up plumber depending on what limit you are after.

Having said that, Plumbing Insurance Sydney is still more expensive than what you can get for in other states, Victoria excluded.

LimitGood PriceAverageRipOff
$5 Million $          741 $       1,072 $       1,387
$10 Million $          915 $       1,305 $       1,661
$20 Million $       1,077 $       1,795 $       2,712

We’ve written an in-depth piece about insurance cost at Plumbers Insurance NSW that you may also want to read.

Queensland

Insurance Compliance Requirements

QBCC do not specifically list the insurance requirements for registration as a Plumbing and Drainage Contractor so a minimum of $5 Million public liability insurance limit is required to be compliant.

Prices

Queensland has one of the most competitive rates when it comes to Plumbing Insurance.

LimitGood PriceAverageRipOff
$5 Million $          604 $          898 $       1,103
$10 Million $          758 $       1,093 $       1,426
$20 Million $          930 $       1,555 $       2,725

Western Australia

Insurance compliance requirements

There are no specific compliance requirements mentioned on the website of Plumbers Licensing Board. So a minimum of $5 million public liability insurance covered should be taken to ensure you and your clients have protection incase something does happen damaging the property or causing an injury to someone.

Prices

Plumbers Public Liability Insurance Cost in WA is very similar to QLD. Slightly more but not as high as NSW or Victoria.

LimitGood PriceAverageRipOff
$5 Million $          667 $          873 $       1,075
$10 Million $          822 $       1,059 $       1,290
$20 Million $          965 $       1,452 $       2,348
Observed Premiums for a Plumbing Business with $100,000 turnover.

South Australia

To register as a plumber in SA, the government has not listed any specific insurance requirements on their website.

A minimum of $5 Million Public Liability cover should ensure that you are covered and subsequently your customers that if their damage to their property of injury to someone due to your to your work then there’s insurance.

Prices

South Australia has one of the most competitive premiums for Plumbers Public Liability Insurance. This is in line with lower premiums for home and motor insurance in SA.

LimitGood PriceAverageRipOff
$5 Million $           629 $          868 $       1,085
$10 Million $           756 $       1,055 $       1,302
$20 Million $           946 $       1,446 $       2,120

We hope the information on this page has helped you understand Plumbing Insurance better and the insights into some of the premiums that we have seen will give you a good understanding what is a good deal vs a ripoff deal and help you make an informed decision when purchasing your insurance.

CoverTradie is specialist Insurance Broker for Tradies. Just like when you have a tooth ache, you go to a dentist and not a GP. When Tradies need Insurance they go to CoverTradie not any General Insurance Broker.

Frequently Asked Questions (FAQ)

What is Plumbing Insurance?

Plumbing Insurance is a general term for a group of Insurance for Plumbing Contractors. The commonly done insurance for plumbers are:

– Public Liability Insurance
– Commercial Vehicle Insurance
– Tools Insurance
– Personal Accident Insurance

Is Plumbers Public Liability Insurance different to other trades?

Plumbers Public Liability Insurance is no different to a standard Public Liability Insurance policy. To get the right insurance for you, it is important to note that the correct occupation and activities of your business are listed on your insurance policy schedule and non of the exclusion are such that may result in declining of a claim. Give us a call to discuss if you have any question.

Can I get Small Business Insurance for Plumbers as a Trades Pack Insurance?

Yes, Small Business Insurance for Plumbers can be obtained as a Trades Pack. It has its some benefits to do so, mostly around convenience of one single invoice. Many different risks can be covered under one Trades Pack Insurance like Plumbers Public Liability Insurance, Tools Insurance, Van/Ute Insurance, Excavators etc. We recommend that if you are getting the best deal with one insurer.
The downside of doing so is that by splitting covers between different insurers. Like everyone else, insurers have their super powers and not every insurer is great at every type of risk.
As we are dealing with underwriters on a daily basis, we’ve kind of figured out where the best deals are and would recommend you whatever is going to be in your best interest.

Do you only do Plumbing Insurance in Victoria?

CoverTradie serves tradies Australia wide. We are based in Victoria but can organise Plumbing Insurance in NSW, QLD, WA, TAS, SA.

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