Plumber Insurance Requirements: Complete Guide for Contractors (2025)

Quick Answer: Plumber Insurance Requirements

Most states require licensed plumbers to carry liability insurance. While specific requirements vary by state, the typical minimums are:

Requirements depend on your license type (journeyman vs. master plumber), whether you're an independent contractor or business owner, and your state's specific regulations.

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Why Plumbers Need Insurance

Plumbing work involves significant risk exposure:

Common Plumber Liability Risks

Water damage claims:

• Burst pipes from improper installation
• Flooding from failed connections
• Mold growth from undetected leaks
• Damage to flooring, walls, and personal property

Property damage:

• Accidental damage to fixtures and surfaces
• Damage while accessing pipes in walls or floors
• Equipment damage to customer property
• Damage during excavation work

Bodily injury:

• Customer injury from exposed work areas
• Injury from hot water system failures
• Gas leak injuries (if licensed for gas work)
• Third-party injuries at job sites

Real Claim Examples

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Insurance Types for Plumbers

General Liability Insurance

What it covers:

• Third-party bodily injury
• Third-party property damage
• Completed operations (damage discovered after job is done)
• Products liability (failed parts you installed)
• Personal and advertising injury

Typical requirements:

Average cost: $500-$2,000 per year for small plumbing operations.

Workers' Compensation Insurance

When required:

• Most states require workers' comp if you have employees
• Some states require it even for sole proprietors
• Commercial clients often require it regardless of state law
• General contractors typically require subs to carry it

What it covers:

• Employee medical expenses from work injuries
• Lost wages during recovery
• Disability benefits
• Death benefits for fatal accidents

States with strict requirements:

• California: Required for all businesses with employees
• New York: Required with 1+ employees
• Texas: Optional but commonly required by clients
• Ohio: State-fund system required for most employers

Average cost: $2,000-$6,000 per year per employee (varies by state and claim history).

Surety Bonds

Many states require plumbers to maintain surety bonds:

Purpose:

• Financial guarantee that work will meet code
• Protects customers if contractor abandons job
• Ensures permit requirements are followed
• Provides recourse for defective work

Common bond amounts:

Average cost: $100-$500 per year (based on bond amount and credit score).

Commercial Auto Insurance

When required:

• Using a vehicle for work purposes
• Company name on the vehicle
• Hauling tools and equipment
• Driving to and from job sites

Coverage types:

• Liability (covers damage to others)
• Collision (covers your vehicle damage)
• Comprehensive (theft, vandalism, weather)
• Hired/non-owned auto (for personal vehicles used for work)

Average cost: $1,200-$3,000 per year per vehicle.

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State-by-State Requirements

Plumber insurance requirements vary significantly by state:

States with Mandatory Insurance

States with Local Requirements

States with Minimal Requirements

Some states have limited mandatory requirements but clients and general contractors typically require coverage regardless:

• Kansas
• Wyoming
• Nebraska
• Missouri (outside St. Louis/Kansas City)

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Who Requires Plumber Insurance?

General Contractors

GCs hiring plumbing subcontractors typically require:

• Certificate of Insurance (COI)
• General liability ($1M-$2M)
• Workers' compensation
• Additional insured endorsement naming the GC

Property Owners and Managers

Commercial properties:

• Minimum $1M general liability
• Professional liability may be required
• Workers' comp required

Residential work:

• Requirements vary
• HOAs often require insurance verification
• New construction requires full coverage

Local Governments

Permit requirements:

• Proof of insurance for plumbing permits
• Bond verification for license renewal
• Insurance on file with licensing board

Public projects:

• Higher coverage limits ($2M+)
• Performance bonds
• Payment bonds

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How to Get Plumber Insurance

Step 1: Assess Your Needs

Consider:

• Your state's licensing requirements
• Types of work you perform (residential, commercial, new construction)
• Whether you have employees
• What your typical clients require
• Value of your tools and equipment

Step 2: Coverage Checklist

Essential coverages:

• General liability ($500K-$1M minimum)
• Workers' comp (if employees)
• Surety bond (per state requirement)
• Commercial auto (if work vehicles)

Recommended additions:

• Tools and equipment coverage
• Business interruption
• Professional liability (errors & omissions)
• Umbrella policy for additional protection

Step 3: Get Multiple Quotes

Sources for plumber insurance:

• Specialty contractor insurance brokers
• Trade association programs (PHCC, etc.)
• Direct insurers specializing in contractors
• Online insurance marketplaces

Step 4: Review Policy Details

Key items to verify:

• Coverage limits meet client requirements
• Completed operations coverage included
• No harmful exclusions (water damage, etc.)
• Claims-made vs. occurrence basis
• Additional insured options available

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Common Insurance Mistakes

Mistake 1: Insufficient Coverage

Problem: State minimums may not be enough for actual claims.

Solution: Carry at least $1M per occurrence, especially for commercial work.

Mistake 2: Gaps in Workers' Comp

Problem: Assuming independent contractors don't need coverage.

Solution: Verify each worker's classification and coverage status.

Mistake 3: Personal Auto for Work

Problem: Personal auto policies exclude commercial use.

Solution: Add hired/non-owned auto or get commercial auto coverage.

Mistake 4: Missing Completed Operations

Problem: Policy expires before leak is discovered months later.

Solution: Ensure completed operations coverage extends beyond job completion.

Mistake 5: Not Updating Coverage

Problem: Coverage doesn't reflect business growth.

Solution: Review policies annually and update for new services, employees, or revenue.

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Frequently Asked Questions

Do I need insurance as a solo plumber?

Yes. Even without employees, you need general liability insurance to protect against property damage and injury claims. Most states require insurance for licensing, and clients typically require proof of coverage before hiring you.

How much does plumber insurance cost?

Typical annual costs:

• General liability: $500-$2,000
• Workers' comp: $2,000-$6,000 per employee
• Surety bond: $100-$500
• Commercial auto: $1,200-$3,000 per vehicle

Total for a small plumbing business typically ranges from $3,000-$10,000 annually.

Can I work under another plumber's insurance?

It depends. If you're a W-2 employee, you're covered under your employer's policies. If you're an independent contractor (1099), you typically need your own coverage. Working without proper coverage puts you at significant financial risk.

What if I only do small residential jobs?

You still need insurance. A single water damage claim from a burst pipe can cost $20,000+. General liability protects your personal assets from such claims, regardless of job size.

Does my insurance cover subcontractors I hire?

Generally no. Your policy covers your work and employees. Subcontractors should carry their own insurance, and you should verify coverage and get certificates of insurance before they start work.

What's the difference between bonded and insured?

Bonded: A surety bond provides financial guarantee that you'll meet contractual obligations. If you fail, the bond pays the customer, and you repay the bond company.

Insured: Insurance protects against accidents and damage. If you cause property damage, your insurance pays without requiring reimbursement from you.

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Key Takeaways

• Most states require general liability and bonds for licensed plumbers
• Workers' comp required when you have employees (specifics vary by state)
• Commercial clients expect $1M+ coverage and certificates of insurance
• Coverage protects your personal assets from liability claims
• Average total cost for small operations: $3,000-$10,000 annually
• Verify requirements with your state licensing board and clients

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Important Disclaimer

This guide provides general information about plumber insurance requirements based on publicly available sources. This is not legal or insurance advice. Requirements vary by state, municipality, and specific licensing categories.

Always verify current requirements with your state's contractor licensing board and consult with a licensed insurance professional for advice specific to your situation.

Last verified: December 2025

Sources: State Contractor Licensing Boards, PHCC (Plumbing-Heating-Cooling Contractors Association), State Insurance Departments