If you run your own plumbing business, you’re probably well aware of the hazards you and your employees face while on the job that could lead to an insurance claim. If you’re just starting out, there are some risks that will be obvious, and others not so much.
Because your customers will expect your plumbing business to have insurance, you want to keep your premiums as affordable as possible, and that means avoiding claims.
The types of claims you are likely to make depend on the type of work you do. Commercial jobs involve different risks than residential jobs, and working on repair or replacement jobs involves different risks than brand new construction projects.
Your plumbing business may accept a variety of jobs, but most specialize as follows:
Residential or Commercial – Generally speaking, residential plumbing projects are much more likely to result in an insurance claim than commercial projects. The reason is simple. Residential buildings simply have a lot more plumbing connections than commercial ones.
Imagine two identical 25-story buildings. Each has 15,000 square feet per story. The first is an office tower, which has a men’s bathroom, a women’s bathroom and a kitchenette on every floor. The second is a condo, which has 15 units per floor, with an average of two bathrooms and a kitchen. The condo has about 20 times the number of plumbing connections of the office tower. The more connections, the more chances for a leak.
New installation or repair/renovation – The number of plumbing connections in a given job is a good predictor of the number and cost of claims you should expect. The other factor that can dramatically affect the risk of a failure is combining different types of plumbing in the same building. If you are working on a brand new building, you are probably working with one kind of plumbing, likely copper, and all the connectors are standard. When you repair plumbing or try to connect new fixtures to an older plumbing system, you may be trying to connect PVC or PEX piping to a system that is mostly copper. For this reason, plumbers working on repairs and renovations are much more prone to make claims than those working only on new construction projects. Repair and renovation jobs can also lead to a large number of fire claims related to welding in tight spaces, around insulation etc.
Your plumbing business prides itself on doing the job right every time. No short-cuts, high-quality materials, top-notch training for your employees. Good for you. This will reduce the likelihood of making a claim, but not completely. If you install all the plumbing for a new condo, and a year later, a pipe springs a leak and damages 4 units, the customer or their insurance company will probably try to recover their losses by suing you. And courts in Canada have been known to assign liability to a plumbing contractor for water losses even if there is no proof that their work caused the loss.
Plumbing is one of the most risky contracting businesses, and there are different kinds of claims that come up. Here are three common claims:
As a plumbing contractor, there are a number of measures you can take to prevent claims:
Learn more about Ontario plumbers insurance.
(Our thanks to Steve Schmelzle from RSA Insurance, one of our trusted contractors insurance partners, who agreed to share his expertise for this piece.)
Want to add to this story? Let us know in comments below! Mitchell & Whale is a fast-growing insurance brokerage in Ontario, striving to make insurance _not suck_ one customer at a time. Give us a call today to discuss any of your insurance needs at 1.800.731.2228.