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Plumbing Insurance Coverage

plumbbHomeowner’s insurance covers the cost of fixing many of the problems that can arise in an aging home. It may cover water damage caused by a leaky roof, damage to interior pipes that burst due to age or poor insulation, and fire damage caused by faulty electrical wiring. While every policy is different, most homeowner’s insurance policies pay for some costs associated with faulty interior plumbing and electrical wiring. Depending upon the policy, problems with exterior plumbing and wiring may or may not be covered.

If the broken sewer line in question is an underground pipe that connects to the main municipal line in your neighborhood, your insurance company will want to know where exactly the break occurred. It is unlikely to cover a break that occurs outside of the “footprint” of your home’s foundation under any circumstances. If the break occurred within the home’s foundation, it may be covered.

In general, homeowner’s insurance covers issues that can be traced to non-negligent damages. This typically excludes the effects of normal aging and “wear and tear.” Before approving or denying your claim, your claims adjuster will want to know the rough age of the pipe. He or she will also examine the length of the pipe to check for other signs of aging like rust or thinning. He or she may also look for loose joints and other signs of faulty workmanship. Finally, your claims adjuster will look for signs of weathering caused by poor or missing insulation.

If your claims adjuster determines that the pipe has broken due to age or weathering, you may face an uphill battle to secure coverage for its replacement. Your insurer will likely deny your claim on the grounds that you should have performed regular maintenance on the pipe or replaced it before it broke. If you report the break as an ongoing problem, the likelihood of this response will increase further. In fact, it may not even be worth your time to report such a recurring issue.

On the other hand, your homeowner’s insurance policy is likely to cover the costs of replacing a sewer line that bursts due to shoddy workmanship or poor insulation. If the break causes water damage in your basement or elsewhere, your policy may cover cleanup-related costs as well. If the break occurs during the winter and can be attributed to freezing, this outcome is even likelier to occur.

3 Reasons You Must Have Plumbing Insurance

  • You may be required by state law to carry this insurance in order to be licensed
  • If you are a general contractor, you may be required to carry plumbers liability insurance in order to work with plumbers
  • Many property owners will require you to show a proof of insurance before they hire you for a job

Business Owner Policies for Small Plumbing Services

Plumbers insurance can be structured several different ways, depending on the insurance company you work with and the size of your business. The basic policy for a small plumbing business will most likely be a bundle of insurance known as a business owner’s policy (BOP).

A BOP plan typically includes:

  • General liability coverage: For damages, injuries or lawsuits that result from accidents or mistakes while performing plumbing work.
  • Property insurance: For damage to your equipment or tools.
  • Loss of income coverage: You can be reimbursed for business income loss up to one year for a covered business interruption.

Additional Plumbing Insurance Coverage

Plumbing and septic companies often need much broader or more extensive coverage than a combined business owner policy to completely cover their risks.

For example, you may want to consider the following additional coverage:

  • Plumbers liability insurance: This coverage will extend your general liability insurance to cover more of the specific risks of your profession. This topic is covered in more detail below.
  • Additional endorsements: If you have made a significant capital investment in tools, equipment and machinery, you can add these items to your insurance policy as endorsements to ensure you are covered against damage or loss.

What Does Plumbers Liability Insurance Cover?

You will want to carefully review your liability risks and ensure that the liability portion of your policy covers your real risks, and does not have any exclusions or gaps in coverage. Adding additional plumbers liability insurance over and above your general liability coverage can help to mitigate your exposure to liability risks.

Some important risks you will want this protection to cover include:

  • Damages during new construction: If you specialize in new projects, you can be held responsible for leaking water lines that damage the new construction. This could include work delays or damage to building materials. The claims can amount to many thousands of dollars out of pocket depending on the length of the disruption and the scope and type of building damage.
  • Damages to exisiting pipes: If the work you perform results in damage to existing plumbing, the costs to rectify the damage can be exorbitant unless you have coverage in place for these costs.
  • Damages that result in gas explosions: Since you work in, around and sometimes on gas pipes, there is the risk of an explosion which can cause extensive damage. This may be result in fire damage or damage from the explosion itself. The cause of the explosion may be hard to pinpoint and you may have to defend yourself against a lawsuit. Plumbers liability insurance provides coverage for legal claims.