Running a plumbing business in the state of Colorado comes with unique risks and insurance needs. From navigating Denver’s unpredictable hail storms and winter snow to understanding local compliance rules across different municipalities, having the proper insurance coverage is crucial to adequately protect your plumbing business. This comprehensive guide examines several key factors that influence insurance costs for plumbers operating in Colorado. It also provides typical premium ranges based on plumbing business size and revenue. Most importantly, it outlines why partnering with the right plumbing insurance specialist as your broker can help Colorado plumbers get tailored policies across top carriers at competitive pricing.

Plumbers working in Colorado need to have the appropriate insurance for plumbing busienss in place. This typically includes liability insurance for plumbers to safeguard against third-party claims and workers’ comp for plumbing companies to cover employee injuries sustained while working.

Key Factors Influencing Insurance Costs

Several important variables drive the cost of insurance for plumbers in Colorado. Gaining an understanding of these influential factors provides helpful context on pricing and empowers business owners to make informed decisions when structuring their policies.

Location within Colorado: Insurance rates for plumbers can fluctuate significantly depending on the specific city, county, and geographic region where your business operates within the state. For instance, premiums in the Denver metro tend to be higher than more rural parts of the state. Factors like local taxes, risk of natural disasters, crime rates, cost of living, and regulation differences across municipalities affect pricing.

Number of Employees: The number of employees a plumbing business has directly impacts the cost of key policies like workers’ compensation. More employees means increased risks and higher premiums. A plumbing company with 10 technicians will pay significantly more than a solo operator or partnership with just 2-3 employees.

Annual Payroll Amount: In addition to the number of employees, the total annual payroll amount also affects insurance pricing. The higher the aggregate payroll, the more expensive workers’ compensation and other policies become. Even if employee headcount is low, higher salaries or payroll will drive up premiums.

Years in Business: In general, brand new plumbing companies are seen as higher risk by insurers and tend to pay more for insurance coverage. Long-standing, established businesses with a lengthy claims-free history typically get much lower insurance rates.

Annual Revenue: A plumbing company’s gross annual revenues are strongly correlated with insurance premium pricing. The higher the revenues, the higher the premiums since greater revenues indicate larger risks and exposure.

Claims History: If a plumbing business has filed frequent claims in the past, whether large losses or numerous small claims, insurance carriers view this as a signal of higher risk and will raise premiums accordingly. Maintaining a clean claims history with zero or few minor claims is one of the best ways to help keep insurance costs in check and secure lower rate plans.

Type of Work: The nature of plumbing work a business specializes in factors into insurance costs as well. Plumbers who focus on specialized high-risk work like commercial pipefitting, industrial projects, or gas line installation can expect to pay higher premiums for general liability coverage compared to residential plumbers doing more routine water heater and drain cleaning jobs.

Policy Limits: The level of liability limits and coverage amounts selected influence cost. Higher liability limits or coverage values add cost but also provide greater protection. However, boosting limits excessively above what is truly needed can waste money. An experienced broker helps set appropriate limits.

Business Properties: If a plumbing business owns various properties such as offices, warehouses, parking lots or other real estate, insuring these properties will add premium cost but deliver important protection against damage perils.

Fleet Size: The number of company-owned vehicles a plumber operates also drives cost. Commercial auto policies, critical for protecting against accident liability and auto property damage, get more expensive the more vehicles are added.

Small Plumbing Business Insurance Costs

For plumbing contractors based in Colorado that are just starting out or have under $150,000 in annual revenue and only 1-2 employees, here are some typical insurance premium ranges to expect:

General Liability: $4,000 – $14,000

Workers’ Compensation: $1,700 – $3,000

Surety Bonds: $100 – $600

Commercial Auto: $1,500 – $3,000 per vehicle

Tools & Equipment Coverage: $250 – $500

Umbrella Liability: $400 – $800 per $1 million in coverage

At this nascent small business stage, partnering with an insurance broker that specializes in working with plumbers and handles this profession day in and day out can be invaluable to help identify the precise coverage types and limits needed without over-insuring or under-insuring. Such plumbing insurance specialists have invaluable familiarity with the unique risks facing plumbing contractors specifically. Avoiding overpaying or leaving dangerous coverage gaps is crucial for new small businesses with limited resources.

Medium Plumbing Business Insurance Costs

As plumbing companies scale and grow across Colorado to around $500,000 in annual revenue and 3-5 full-time employees, insurance premiums for key coverages understandably increase and expand accordingly:

General Liability: $14,000 – $29,000

Workers’ Compensation: $5,000 – $9,000

Surety Bonds: $100 – $600

Commercial Auto: $1,500 – $3,000 per vehicle

Tools & Equipment Coverage: $500 – $1,000

Umbrella Liability: $400 – $800 per $1 million in coverage

Cyber Liability: $750 – $1,500

For plumbing businesses at this growth-phase stage, partnering with an insurance broker who specializes specifically in the plumbing trade versus just general contracting can be invaluable. The plumbing expertise allows them to structure policies across multiple carriers to create a tailored and cohesive coverage program at the best possible rates. Avoiding coverage gaps as operations expand is crucial.

Large Plumbing Business Insurance Costs

For well-established plumbing contractors in Colorado with over $1 million in annual revenue and 5+ full-time employees, insurance premiums scale up accordingly:

General Liability: $26,000 – $68,000

Workers’ Compensation: $8,000 – $15,000

Surety Bonds: $100 – $600

Commercial Auto: $1,500 – $3,000 per vehicle

Tools & Equipment Coverage: $750 – $1,500

Umbrella Liability: $400 – $800 per $1 million in coverage

Cyber Liability: $1,000 – $2,000

Errors & Omissions: $1,000 – $2,000

Larger plumbing businesses have greater risks, assets, exposures, and more complexity. For them, partnering with an experienced local plumbing insurance broker who’s been in market for many years and has connections with top carriers has invaluable advantages. Such a broker has the insurer relationships and expertise to secure complete, tailored coverage across multiple policies at very competitive pricing not possible on their own.

Additional Insurance Coverages

Beyond the major policies listed for the business size examples above, Colorado plumbers may also consider some of the following additional coverages depending on their specific operations and assets:

Builder’s Risk – Covers plumbing projects under construction before completion. This protects against property damage during the construction process.

Commercial Crime – Safeguards against losses from employee theft, robbery, burglary, and other criminal activity that could target plumbing businesses.

Employment Practices Liability – Shields against employment-related lawsuits alleging things like discrimination, wrongful termination, sexual harassment, etc.

An insurance broker familiar with the array of risks facing plumbing contractors can advise which additional coverages beyond the core policies are prudent to consider for each individual business based on its unique operations, assets, and exposures.

How Insurers Calculate Premiums

To determine what premiums to charge a plumbing business for policies like general liability, commercial auto, umbrella, and workers’ compensation, insurance carriers carefully evaluate many attributes of the business to assess its overall risk. Some of the key factors considered:

  • Class codes grouping employees based on occupational duties and risks
  • Experience modification factor representing the plumbing company’s historical loss run claims history
  • Total annual payroll amounts indicating the compensation insurance risk
  • Gross annual revenues as a proxy for overall business size and risk exposure
  • Geographic location and characteristics of where the plumber operates within Colorado
  • Number, make, model, usage radius, and garaging of company vehicles
  • Value of insured tools, equipment, project worksites, and other property
  • Safety protocols and risk management procedures
  • Selected liability limits and deductible levels

An independent plumbing insurance broker expert understands how underwriters assess all these variables when evaluating a plumbing risk. By presenting each client’s unique business profile favorably to carriers and benchmarking against other plumber accounts, a broker advocates to maximize coverage and minimize premiums. Trying to directly buy insurance without an intermediary representing your business means leaving these potential savings on the table.

Getting the Right Insurance for Your Plumbing Business

A key lesson for plumbing business owners across Colorado aiming to optimize their insurance program is that partnering with the right insurance advisor as your broker can make a tremendous difference both in coverage secured and cost of policies. Avoiding the common mistakes many contractors make, like trying to buy insurance online direct from carriers, sticking with an inadequate policy without regular review, relying on a generalist agent rather than trade-specialist broker, or focusing only on policy premium cost versus overall value, is critical. If you’re interested in acquiring a Colorado Plumbing License, our article provides comprehensive guidance on the process.

Instead, plumbing company owners are wise to build a relationship with an independent local insurance brokerage that specializes in the plumbing trade specifically, not just general contracting. Such niche insurance brokers that focus intently on the plumbing sector better understand the precise risks facing plumbing contractors every day. This expertise translates into tailored policy creation by identifying the optimal coverage types, limits, and add-ons needed to protect the plumbing business at each specific stage of growth and locale.

Just as crucial, an independent broker who concentrates on the plumbing field becomes a trusted partner to top national and regional insurance carriers that actively want to write plumbing contractor accounts. These carriers compete aggressively on price to earn the broker’s plumbing business, while also relying on the broker’s underwriting expertise to vet risks. This specialized broker access results in securing advantageous policy options, plan structures, and ultimately rates not feasible without such carrier connections.

In contrast, trying to buy insurance directly online or through a generalist agent lacking focused plumbing experience could mean you overpay for unnecessary coverage, underpay and remain ignorant of key risk gaps in your policies, endure frustrating claims delays, or get stuck year-over-year with inadequate legacy plans. Only a plumbing insurance specialist has the expertise to customize policies specifically for your business and leverage their large book of plumber customers to get you the best pricing. They make sure you aren’t overpaying to fill unnecessary gaps or conversely underpaying and leaving your business underinsured against consequential perils.

Don’t drain your wallet on insurance premiums or lose sleep worrying about risk gaps in coverage. Consult with the top Colorado insurance brokerages that focus specifically on protecting plumbing contractors and have helped dozens of local companies thrive safely over the years. Leverage their expertise and carrier clout to get the ideal coverage your business needs at extremely competitive rates.

Conclusion

Operating and growing a plumbing business in Colorado introduces some unique insurance needs and cost considerations between compliance requirements, workforce factors, evolving operations, assets mix, and more. Gaining familiarity with the key variables that drive insurance costs allows plumbing company owners to make smarter decisions when structuring policies and budgeting for premiums. However, even with a solid understanding of basic insurance, partnering with the right plumbing insurance broker is the #1 strategy to get tailored, comprehensive policies across specialized carriers at the best possible rates. Such brokers become invaluable advisors protecting everything you’ve worked hard to build so you can focus on providing excellent plumbing service to customers and continuing to expand your company.