Don’t overlook the insurance requirements during the bidding and contract process. The earlier you see a project's insurance requirements, the more time you have to check your coverage against the contract and build any added cost into the bid. 

What a Certificate of Insurance Can and Can't Do 

A certificate of insurance, commonly called a COI, provides evidence of insurance coverage. General contractors, property managers and commercial clients may request one before allowing a plumber onto a jobsite.

Providing your COI may be straightforward when your existing policy already meets the contract requirements, but problems can arise when the contract calls for something different.

A commercial agreement may require higher liability limits or additional insured status for another party. Some contracts may even contain additional insurance provisions that can require changes to existing coverage.

You should identify those terms before signing a contract or submitting a final price for the work. A COI cannot change the coverage provided by the underlying policy, so simply producing proof of insurance doesn’t resolve a requirement the policy doesn’t meet.

Higher limits or policy changes can raise the insurance cost of a job, so it's worth pricing them before submitting a bid. 

Plumbing Work Carries Significant Property Damage Exposure

Water can turn a relatively small plumbing problem into an expensive property loss.

A failed connection, installation error, or accidental damage to an existing pipe can affect flooring, drywall, cabinetry, equipment, and other property around the work area. Plumbers also work inside buildings they don’t control, which means an incident can affect property belonging to a customer or building owner.

Commercial general liability policies typically address certain claims involving third-party bodily injury and property damage, subject to the policy's terms, conditions, and exclusions. Coverage can vary based on the circumstances of a claim and the policy involved.

You should pay particular attention to the type of work your business performs. Service and repair work in occupied buildings can create exposures different from those in new construction. Larger commercial projects can also increase the amount of property and the number of people around a plumbing contractor's work.

Those differences matter when a plumbing business begins taking jobs that fall outside its usual mix of work.

Commercial Contracts Can Change the Cost of a Job

A plumber may price a job based on labor, materials, equipment, and the expected time required to complete the work, but contractual insurance requirements can introduce even more expenses. 

A general contractor may require liability limits higher than those the plumbing company normally carries. Closing that gap may mean added coverage or policy changes. If the job requires a bond, that's a separate cost, since bonds are priced apart from insurance. On a tight bid, that can be the difference between a profitable job and a break-even one. 

Plumbers who understand insurance requirements during the bidding process can account for those costs when pricing the project. Discovering them after accepting the work gives the business fewer options. You may have to absorb an unexpected insurance expense, renegotiate terms, or risk delaying the project.

Liability Coverage Doesn't Protect Your Own Equipment 

Liability claims are only one part of a plumbing company's exposure. Your tools and equipment can represent a substantial investment with added risk since you carry them with you from job to job.

From power tools to inspection cameras, you need a lot of specialized equipment to do your work. Theft or accidental damage can leave you without the gear you need to tackle your next job.

Coverage for your business is not the same as liability coverage. Property policies can also handle equipment away from the insured premises differently, depending on the carrier and policy form. Some forms may provide off-premises coverage subject to a sublimit, while others may provide different limits or conditions.

Plumbers should understand how their policy treats the equipment they routinely take into the field and whether the available limit reflects the value of what their crews actually carry.

A growing plumbing company may also need to revisit those numbers over time. Adding crews or purchasing more specialized equipment can increase the amount of business property away from the primary location on any given day.

Growth Can Change a Plumber’s Insurance Needs

Your insurance policy may fit its current operations and still need attention as the business changes.

Hiring employees, purchasing more equipment, or moving from residential service work into commercial construction can introduce new exposures and contractual requirements. Working for a larger general contractor may also bring insurance provisions that the business hasn’t previously encountered should know what the contract requires, whether your current policies satisfy those requirements, and what additional insurance or bonding could cost before committing to the job. Those answers can help a plumbing company price the work more accurately and avoid finding an unexpected insurance requirement after the project is already on the schedule.