Operating a plumbing company in Utah requires more than just expertise with pipes and drainage systems. To build a sustainable business, plumbers need to safeguard their company, employees, assets, and reputation from unforeseen risks. The primary shield against these potential dangers is insurance. This comprehensive guide will illuminate what insurance costs Utah-based plumbers can expect, outline the key factors that influence premiums, provide an overview of policies needed at different stages of business growth, and explain how to work with an agent to get the right insurance for your plumbing operation.

Utah plumbers must have the proper plumber insurance policies to operate legally in the state. 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 on the job.

Key Factors That Influence Insurance Costs for Plumbers

Several crucial elements determine the insurance premiums that plumbers operating in Utah will pay. Understanding these key factors provides insight into what drives the costs of essential policies like general liability, commercial auto, workers’ compensation, and more.

Location of Business: Being based in Utah affects insurance rates compared to other states due to differences in state regulations, local hazard risks, cost of living, lawsuit climate, and other locality-specific variables. Each state has its own unique risk environment.

Line of Plumbing Work: The nature of plumbing services provided can significantly impact insurance costs. Specialized, high-risk plumbing work such as gas line installation or sewer pipe repair often costs more to insure versus more routine tasks like drain cleaning. The greater the hazard, the higher the premium.

Years in Business: Plumbing contractors just starting out who have less experience in the field often pay higher insurance premiums compared to well-established businesses that have been operating for decades. Longevity, strong reputation, and a clean claims history help plumbers secure lower premium costs over time.

Annual Revenue: As a general rule, the more revenue a plumbing business generates from undertaking plumbing work, the higher the insurance premiums charged. More revenue means the company is likely completing more plumbing jobs, which raises the chances of an injury, property damage, or liability claim occurring. Thus, higher revenue equals higher premiums in most cases.

Number of Employees: The more plumbers and other employees that are working for the business, the increased likelihood there is for workplace accidents, injuries, and workers’ compensation claims to arise. Additional staff members will inevitably raise premium costs across policies.

Policy Limits: Opting for higher liability limits and higher coverage amounts on insurance policies adds more protection for plumbing contractors. However, increased limits also mean increased insurance premiums. There is always a balance between how much coverage is truly needed versus keeping premium costs affordable. Scrimping too much on liability limits puts a business at severe financial risk however.

Claims History: If a plumbing company has filed frequent insurance claims in prior years, whether related to workers’ comp incidents, auto accidents, liability disputes, or property damage, this track record of past claims will push premiums upward. Conversely, maintaining a clean claims history with minimal or no prior claims is essential to help keep insurance costs more affordable.

Credit History: Insurers may view plumbers with poor personal credit histories or backgrounds of bankruptcy as riskier and less financially stable. As such, a strong credit background can potentially help lower insurance premium costs for coverage like commercial auto and general liability. However, premiums for legally mandatory policies like workers’ comp do not take credit into account.

Insurance Needs for a Small Plumbing Business

For plumbing businesses based in Utah that are on the smaller side, generating around $150,000 or less in annual revenue, and employing only about 1 full-time worker in addition to the owner, typical insurance premium costs could range from:

  • General Liability: $4,110 to $9,547 per year
  • Workers’ Compensation: $1,269 to $2,220 per year
  • Surety Bonds: $150 to $750 per year

Some of the key insurance policies that small plumbing businesses need to prioritize include:

General Liability Insurance – This is essential protection that covers against third party bodily injury, property damage, personal injury and advertising injury claims arising from your plumbing operations. General liability is commonly the primary insurance coverage obtained by most small plumbing contractors and businesses.

Commercial Automobile Insurance – This policy covers vehicles used for business purposes, such as work vans. It pays for damages to other parties resulting from auto accidents. In many cases, the legally required minimum auto insurance amounts are inadequate. Plumbers need higher and complete coverage.

Workers’ Compensation – This legally required insurance pays for injuries suffered on the job by employees. It covers lost wages and medical treatment per state regulations. Workers’ comp is critical for plumber business owners to protect their staff’s well-being and avoid lawsuits.

Surety Bonds – Most states require plumbers to be bonded in order to be licensed and operate legally. These bonds guarantee that contractual obligations will be fulfilled. In Utah, typical bond amounts range from $5,000 to $25,000. The annual bond premium is usually 1% to 3% of the bond amount. If you’re interested in the required qualifications, check out our article on how to obtain a Utah Plumbing License.

Inland Marine (Equipment) Insurance – This covers tools and equipment such as pipe cutters, drain machines, and instruments that are taken on and off job sites. Having this insurance to pay for theft or damage is essential for plumbing contractors.

Errors & Omissions (E&O) – This protects against liability claims alleging faulty workmanship or negligence. While not always mandatory, E&O coverage is wise for plumbers taking on more complex residential or commercial projects where design flaws could result in significant financial loss allegations.

Insurance Needs for a Mid-Size Plumbing Business

For established plumbing businesses in Utah generating approximately $500,000 in annual revenue, and employing around 3 full-time plumbing workers in addition to the owner, typical annual insurance premium expenses could span:

  • General Liability: $14,932 to $29,864
  • Workers’ Compensation: $3,806 to $6,661
  • Surety Bonds: $150 to $750

As plumbing operations grow to this moderate mid-size level, some key insurance policies to consider adding beyond just the foundational small business coverages include:

Umbrella Liability Insurance – This provides extra liability coverage and higher limits above the existing general liability, auto, and other underlying policies. Umbrella insurance is added on top to provide an additional layer of protection from lawsuits.

Cyber Insurance – This covers data breaches, hacking incidents, and electronic theft. It is wise for mid-size plumbing businesses to consider cyber policies if they store client information digitally, rely heavily on computers, or take credit card payments.

Commercial Property Insurance – This protects your business premises and physical building as well as plumbing equipment from perils like theft, fire, storms, and vandalism if you own your workspace.

Employment Practices Liability – This coverage protects against employment-related lawsuits around issues of discrimination, sexual harassment, wrongful termination, and other employee disputes. It is worth considering once your staff expands beyond just family and a few individuals.

Insurance Needs for a Large Plumbing Business

For full-scale plumbing contractors in Utah generating over $1,000,000 in yearly revenue, and employing roughly 5 or more plumbing workers on staff, in addition to support personnel, office staff, and the owner, typical low-end to high-end annual premium ranges could be:

  • General Liability: $31,920 to $63,840
  • Workers’ Compensation: $6,344 to $11,102
  • Surety Bonds: $150 to $750 per year

As plumbing businesses grow to this larger size, with more locations, vehicles, employees, and risks to cover, it becomes essential to work with an independent insurance agent or broker who can provide access to niche markets beyond just standard insurers. Taking a cookie-cutter approach will likely result in gaps in coverage. Significant assets and risks require going beyond the typical mainstream insurance providers to craft a tailored, comprehensive protection program leveraging specialty insurance carriers.

Additional Insurance Coverages to Consider

While general liability, commercial auto, and workers’ compensation make up a basic insurance foundation most plumbing businesses need, more advanced operations have additional risks to safeguard against:

Tools and Equipment Coverage – This pays to repair or replace stolen or damaged plumbing tools. Premiums range around $250-$750 per year based on value of tools.

Commercial Building Insurance – For plumbers owning their office or warehouse space, this is protection against property damage from perils like fire. Premiums typically range from $500 to $2,000+ per year.

Errors & Omissions Insurance – This professional liability coverage defends against financial loss claims due to mistakes or negligence. Typically costs $500 to $1,000 annually depending on project size.

Employment Practices Liability – This protects against employee lawsuits around discrimination, wrongful termination, harassment allegations, etc. Typically costs $1,000 to $3,000 per year.

Fleet Insurance – For plumbing contractors running multiple vehicles, this is a comprehensive single policy covering all business vehicles.

Crime Insurance – This covers equipment, tools, and inventory that are stolen. Usually around $400 to $1,000 per year.

Cyber/Data Breach Insurance – This responds to hacks and digital theft. Appropriate if you collect client data digitally. Can run $750 to $2,000+ per year.

How Insurance Carriers Calculate Plumber Premiums

When underwriting insurance policies for plumbing contractors, insurance carriers take numerous factors about the business into account to determine suitable premium pricing based on the perceived level of risk. Among the key criteria examined are:

  • Gross annual sales revenue of the plumbing business
  • Full employee roster with details on positions, experience, licenses, payroll amounts
  • Claims history and prior losses
  • Business owner’s personal credit standing and financial background
  • Number of years the plumbing business has been in operation
  • Inventory of plumbing vehicles, tools, equipment used for the trade
  • Geographic service regions and states where work is conducted
  • Types of plumbing services provided (e.g. residential, commercial, industrial)
  • Use of subcontractors and their coverage details
  • Typical job and project types and risk exposures
  • Safety record, employee training regimen, and workplace protocols

By gathering data on these variables of the business, underwriters are able to make informed calculations regarding potential hazards and exposures. This allows them to derive suitable premium pricing tailored to the plumbing contractor based on their unique risk profile. Being transparent and thorough when providing background information enables insurers to accurately assess and rate policies.

Partnering With the Right Insurance Agent for Your Plumbing Business

Working with an independent insurance agent or broker who focuses specifically on the plumbing trade is vital for contractors to secure adequate, affordable insurance in Utah. This specialized expertise allows an agent to leverage their carrier relationships and craft tailored coverage solutions specifically for a plumber’s needs, tapping into top regional and national insurance markets.

There are several key benefits plumbers receive when partnering with an insurance specialist who understands their industry’s unique risks:

  • Access to niche markets beyond just standard insurers. This includes access to leading markets providing tailored policies and superior claims handling for plumbing risks.
  • Policy customization based on the specific risk exposures and gaps faced by your plumbing business model. No two plumbing operations are exactly alike.
  • Leveraged clout when negotiating contract terms, endorsements, premiums, and policy conditions thanks to established insider carrier relationships.
  • Ongoing policy maintenance to continually update coverage as your business changes, preventing coverage gaps over time.
  • Expert guidance during renewal, audit, underwriting, and claims processes from an advocate who understands plumbing risks.
  • Familiarity with state regulatory compliance including backgrounds on local licensing, permits, bonding requirements, and hazard awareness.

This specialized approach provides plumbing business owners with an optimal insurance program at competitive pricing not achievable through standard insurers. Be wary of cut-rate policies offering bare minimum coverage. Discuss your specific business needs and risk concerns with a plumbing specialist. They will make sure you get tailored recommendations and solutions.


Operating a plumbing company requires managing liquid assets – and potential liabilities. Staying informed on insurance costs, coverages needed, and regulations in Utah allows contractors to make budgeting decisions and protect their livelihoods wisely. Work closely with an independent, specialized plumbing insurance agent who provides access to top niche markets and crafts customized protection solutions. They will prove an invaluable long-term asset helping your business remain financially sound, compliant, and covered.