For plumbers operating as a limited company or sole trader, correct insurance is an essential part of running your business and ensuring you are compliant.
In some areas of your business, it is a legal requirement. For example, if you employ anyone, you must have employers’ liability insurance. In addition, you need to insure your tools and equipment against loss, theft, or damage, and to protect your business against damage or injury claims.
If you’re not insured, the costs, time spent, and stress involved in such claims can be devastating for your business.
Understanding the different types of cover available and their associated costs is therefore essential for making informed decisions about your plumbing insurance.
When considering plumbing insurance, it's important to understand the different types of cover available to ensure you have comprehensive protection.
The types of insurance you need and what your plumbing insurance covers will depend on your unique circumstances, but key areas to consider include:
Public liability insurance
If your work brings you into contact with members of the public, you should consider public liability insurance. This is designed to cover situations where you or your business causes damage or injury to a third party.
For example, if your work triggered a flood in someone’s home, public liability insurance can help cover the costs of the resulting damage.
Product liability insurance
Product liability insurance is essential if your work involves installing products such as boilers, water pumps, or heating systems. This cover is designed to protect your business in the event of damage or injury caused by something you’ve installed.
Employers’ liability insurance
If you employ anyone, even part-time staff, apprentices, volunteers, or some contractors, you are legally obliged to have employers’ liability insurance.
It’s important to check with your insurance company to confirm your obligations, and not to assume you are exempt simply because you work with contractors or don't consider yourself a traditional ‘employer’.
Professional indemnity insurance
If you provide professional advice about designs or specifications as part of your plumbing services, you may need professional indemnity insurance. This will cover you and your business if you give negligent or faulty advice that causes financial loss to a client.
Tools and equipment insurance
The tools of your trade are one of your most valuable assets, and it's vital to ensure they are properly insured against theft or damage. This should include not only your tools, but also essential equipment and your vehicles, which are crucial for your daily operations.
Business premises insurance
You should also ensure your business premises are adequately insured.
If you work from home, check your home insurance policy to confirm it extends to cover business equipment and the premises themselves.
If you operate from dedicated business premises, or work at various client locations, you will also need to consider appropriate cover.
Business interruption insurance
Consider business interruption insurance to protect against potential loss of income if your business is unable to operate due to unforeseen circumstances. This could include a range of issues beyond your control, such as delays to large projects or personal circumstances that prevent you from working.
By law, you must have a have a minimum of £5 million employers’ liability cover, although insurers will typically offer up to £10 million.
For other areas of your business, different levels of cover may be needed. For example, insurance for your tools may only require cover from £1,000, whereas public liability cover is often available in levels ranging from £1 million to £10 million.
The appropriate level of cover will depend on a detailed assessment of your specific business operations and risk profile.
An insurer will take account of several factors to calculate your premium.
The size of your business and the number of employees or contractors you have (if any) will be considered, as businesses with more employees typically face higher potential risks.
You may need insurance whether you are a sole trader or a limited company, but your insurance premium may be a little more if you operate as a limited company, reflecting potentially different risk profiles.
Insurers will also want to understand the types of projects you undertake and the nature of your clientele. This helps them evaluate the level of risk involved; for instance, a plumber primarily dealing with minor domestic repairs might be seen as lower risk compared to one handling complex heating system installations in large commercial buildings.
Additional factors that can influence your premium include your geographical location, as certain areas may be associated with higher risks of theft or specific types of claims, and your claims history, as a history of previous claims can indicate a higher likelihood of future claims.