Operating a plumbing business in Oregon entails more than just mastering pipes and drainage systems. To build a thriving company, you must safeguard your business, employees, assets, and reputation from unforeseen risks. A crucial shield against these threats is having proper insurance coverage tailored for a plumbing contractor. This extensive guide will illuminate typical insurance costs for plumbers in Oregon based on your company’s size, experience level, location, and other vital risk factors. It also outlines the major types of insurance policies a plumbing business needs, key variables that influence your premiums, and the importance of partnering with an independent broker who specializes in the plumbing trade.

For plumbers in Oregon, having the right insurance protection for their plumbing business is essential. This usually includes general liability protection for plumbers to protect against third-party claims and workers’ compensation coverage for plumbing businesses to cover employee injuries on the job.

Key Factors That Impact Plumber Insurance Costs

Numerous elements affect a plumbing company’s insurance rates in Oregon. It’s critical to understand these factors to effectively manage your insurance expenses.

Revenue: As your annual revenue grows, your business takes on more work volume and likely adds employees. This increased exposure leads insurers to perceive you as a higher risk, raising your premiums.

Years in Business: New plumbing companies generally pay higher premiums until they establish a claims history. Once you’ve been operating for several years with minimal claims, insurers gain more comfort with your risk profile and premiums decline.

Claims History: Too many past claims, especially large ones, make insurers see you as prone to future claims. This markedly increases your premiums due to the higher perceived risk. Maintaining a clean claims record keeps rates affordable.

Number of Employees: Having more employees expands your exposure to workers compensation claims. Each additional employee increases the chance someone gets injured on the job. More employees directly correlate to higher premiums.

Location: Operating in geographic areas prone to natural disasters or with high crime rates leads to costlier premiums across all policies. Location is a major cost determinant.

Deductible: Choosing a higher deductible reduces premiums but increases your out-of-pocket costs in the event of a claim. This lever lets you partly control costs.

Policy Limits: Higher liability limits cost more but provide greater protection from large claims. Don’t cut this coverage to save money.

Small Plumbing Business Insurance Costs

In Oregon, a small plumbing business is generally defined as having 1-2 employees and less than $500,000 in annual revenue. Here are the typical annual premium ranges for the major insurance policies a smaller plumbing contractor would need:

General Liability Insurance
Typical Premium Range: $3,800 – $13,000

General liability insurance is essential to cover legal costs, settlements, and judgments resulting from third party bodily injury or property damage claims. As a plumbing business interacting regularly with customers, accidents and unintentional damage are risks you encounter routinely. General liability insurance protects your business assets in these situations.

Workers’ Compensation Insurance
Typical Premium Range: $1,100 – $2,000

Workers’ compensation insurance covers medical expenses and lost wages for employees who suffer job-related illnesses or injuries. It’s mandatory for nearly all employers in Oregon. Premiums are based on payroll and an assigned risk class code. Plumbing has a moderately low risk code compared to professions like roofing.

Surety Bonds
Typical Premium Range: $100 – $500

Most municipalities require plumbing contractors to obtain surety bonds to be licensed in their jurisdiction. The bond is typically $5,000 – $10,000 and you pay 1%-5% of that amount as the annual premium. The cost does not rise much based on company size.

Medium Plumbing Business Insurance Costs

A medium-sized plumbing business typically has 3 employees and brings in $500,000 in annual revenue. Here are the standard premium ranges at this business scale:

General Liability Insurance
Typical Premium Range: $15,000 – $26,000

The wide premium range stems from greater variation in work volume. Payroll also expands with more employees, driving up costs.

Workers’ Compensation
Typical Premium Range: $3,400 – $6,000

Additional employees and payroll elevate workers’ comp costs due to increased injury likelihood.

Surety Bonds
Typical Premium Range: $100 – $500

Requirements usually don’t rise with moderate business growth.

Large Plumbing Business Insurance Costs

For a plumbing contractor, being large-scale means having over 10 employees and more than $1 million in yearly revenue. Here are typical premiums for big plumbing operations:

General Liability Insurance
Typical Premium Range: $30,000 – $60,000+

The drastic rise in premium range demonstrates the impact business growth has on liability insurance costs. Work volume is hugely amplified compared to a smaller company.

Workers’ Compensation
Typical Premium Range: $5,600 – $10,000+

A large roster of employees exponentially increases workers’ comp exposure due to the high probability of claims.

Surety Bonds
Typical Premium Range: $500 – $1,500+

Larger plumbing contractors often must meet higher bond requirements for licensure and permits. If you are interested in becoming a licensed plumber, get all the necessary details from our Oregon Plumbing License article.

Additional Insurance Coverages

In addition to the core insurance coverages of general liability, workers’ compensation, and surety bonds that form a basic foundation, plumbing contractors may want to consider these supplemental insurance products to fully protect their business:

  • Commercial Auto Insurance: Covers liability and physical damage risks associated with company vehicles driven for business purposes, whether owned, leased, rented or borrowed.
  • Property Insurance: Protects the physical premises, warehouses, inventory, equipment and business improvements against losses from perils such as fire, storms, theft and vandalism.
  • Inland Marine Insurance: Insures contractors’ tools and equipment both at job sites and in transit between locations against loss or damage.
  • Cyber Insurance: Provides coverage for data breaches, hacking incidents, theft of customer information and other digital crimes that could critically impact operations.
  • Errors & Omissions Insurance: Handles financial damages arising from mistakes, faulty workmanship or negligence that do not involve bodily injury or property damage.
  • Employment Practices Liability: Protects against claims of employment discrimination, wrongful termination, workplace harassment, improper worker classification and other labor-related allegations.
  • Business Interruption Insurance: Replaces income lost if disasters or other covered losses force a suspension of plumbing operations, reimbursing for lost revenues until business resumes.
  • Commercial Umbrella Insurance: Provides liability limits above and beyond what is covered in underlying policies.
  • Builder’s Risk Insurance: Insures new construction projects throughout the building process against damage-related delays and losses.

How Insurers Determine Plumber Premiums

Insurance carriers utilize data and predictive models to derive annual premiums for plumbing contractors. Here are key inputs that influence the premium set for your business:

Class Codes: The National Council on Compensation Insurance (NCCI) assigns numbered risk classification codes to various occupations. Plumbing is categorized under code 5183 which carries a moderately low risk factor. Roofing has a higher loss rate. Insurers apply this relative risk in determining your workers’ compensation premium.

Experience Modification: This compares your actual claims history to average plumbing business claims. A rating above 1.0 indicates frequent past claims and higher premiums. Below 1.0 shows fewer claims than expected, lowering your premium.

Payroll: For workers’ compensation insurance, the premium formula is: Payroll x Class Code Rate x Experience Mod. Higher payroll directly increases premiums due to the expanded exposure.

Revenue: General liability premiums are often quoted as a percentage of revenue, typically ranging from 3% to 6% of annual sales depending on risk characteristics. More revenue means higher premiums.

Number of Employees: Additional employees add to payroll and boost workers’ comp exposure due to more people who could potentially get injured.

Fleet Size: Auto insurance is priced per vehicle. Operating a larger fleet size directly leads to paying higher overall premiums.

Equipment Value: Premiums for tools and equipment coverage are a function of your total insured value. The higher the value, the more it costs to insure.

Trend Factors: Insurers increase premiums moderately each renewal to account for inflation in medical care, material costs, etc. These trend factors reflect rising costs over time.

Territory: Geographic territories have risk differentials that factor into pricing. Urban territories often have pricier premiums than rural areas due to higher crime rates and claim severity.

Getting the Right Insurance for Your Plumbing Business

Given all the complex variables that determine premiums, partnering with an independent insurance broker who specializes in the plumbing trade is absolutely essential. They have access to niche insurance carriers and programs not available to standard agents. An independent broker shops multiple insurers to get you the optimal combination of coverage, service, and pricing. Compared to agents representing just one company, an independent provides unbiased recommendations tailored to your specific risks. They keep current on insurance trends, regulation changes, and plumbing trade practices to continually improve your coverage and control costs. Don’t go it alone. An expert plumbing insurance broker structures your policies for maximum protection at competitive rates.


Running and growing a plumbing business in Oregon requires insulating yourself from key risks through proper insurance tailored to the plumbing industry. While premiums rise as your revenues and payroll expand, adequate insurance is vital for plumbers of all sizes to deflect risk away from your company’s finances. Partnering with an experienced independent plumbing insurance broker gives you a great advantage through their market access, risk expertise, and ability to customize coverage for your specific needs. They provide optimal protection so you can feel confident focusing on your customers and crafting an outstanding reputation in the Oregon plumbing community.