As a plumber, having proper insurance coverage is crucial to protecting your business. Workers’ compensation insurance specifically helps cover costs if an employee is injured on the job. Without adequate coverage, a single employee injury could devastate your company’s finances.

This comprehensive guide will explain everything plumbers need to know about securing the right workers’ compensation policy. We’ll cover key topics in depth like:

  • What Is Workers’ Compensation Insurance?
  • Why Plumbing Contractors Need Workers’ Comp
  • What Does Workers’ Comp Insurance Cover?
  • Exclusions to Be Aware Of
  • How Much Does Workers’ Comp Cost for Plumbers?
  • Strategies to Reduce Your Workers’ Comp Premiums
  • How To Get Tailored Workers’ Comp Coverage

Read on for a detailed overview of how workers’ compensation insurance works and why plumbers need appropriate protection.

What is Workers’ Compensation Insurance?

Workers’ compensation insurance provides medical, rehabilitation, and wage replacement benefits to employees who sustain injuries or illnesses arising out of the course of their work.

As a plumber, your employees may be injured on the job in a variety of ways – back injuries from heavy lifting, slips and falls on worksites, lacerations from tools, respiratory issues from sewer gas exposure, and more. Workers’ compensation coverage pays for their medical treatment and compensates for a portion of lost wages while injured.

This insurance is mandatory for nearly all employers in the US. Even in states where it is optional, it is critically important. Without workers’ compensation, injured employees could sue your business directly to recover costs. This could absorb hundreds of thousands in legal fees and settlements.

Workers’ compensation laws are determined on a state-by-state basis but have some common elements:

  • No-fault coverage – Benefits must be paid regardless of who was at fault for an injury.
  • Exclusive remedy – Prevents separate lawsuits against the employer. Workers’ comp is the exclusive remedy.
  • Mandatory coverage – Nearly every state requires coverage with few exceptions. Failing to carry this insurance leads to significant fines.
  • Employer-financed – Employers foot the bill for all premiums. Employees are not required to contribute.

As the employer, it is your responsibility to purchase adequate workers’ compensation for all your staff and maintain compliance with your state’s guidelines. Failing to do so poses tremendous financial risks to your plumbing business.

Why Do Plumbing Contractors Need Workers’ Comp Insurance?

Due to the physical nature of plumbing work, employee injuries are common. Situations requiring workers’ compensation benefits could include:

  • Back sprains, hernias, and other muscular injuries from lifting heavy water heaters, pipe coils, sinks, or other plumbing equipment. Plumbers frequently lift 50+ pounds.
  • Lacerations, amputations, or burns from power saws, razor blades, torches, metal shards, or other hand tools. Many sharp and dangerous tools are used.
  • Respiratory issues like asphyxiation or lung damage from sewer gas exposure or chemical fumes while working in confined spaces.
  • Fractures, contusions, or concussions from slip, trip, and fall accidents on plumbing sites which may be wet, muddy or cluttered with tools and materials.
  • Electrocution or serious burns from improper handling of live wires and connections while doing electrical work. This is a major risk.

Even with robust safety precautions, plumbing projects carry inherent risks on a daily basis. The financial costs of these employee injuries can easily climb into the tens or hundreds of thousands of dollars when medical bills and lost wages add up.

Having proper workers’ compensation insurance coverage is the only way to cover these costs without financial disaster. It helps keep your business afloat if an on-the-job accident occurs by paying for the injury. This insurance is just as crucial as general liability coverage for plumbers to have ironclad protection.

Moreover, nearly every state requires plumbers to carry workers’ compensation insurance on their employees. Even in monopolistic states where coverage must be purchased through a state-run fund, plumbers must still carry this insurance. These states include North Dakota, Ohio, Washington, and Wyoming.

All states require workers’ compensation except Texas and Oklahoma. In Texas, workers’ comp insurance is optional for plumbers. However, ~90% still choose to purchase this coverage to limit liability. If not carried, employees can sue the plumber directly for injuries. In Oklahoma, workers’ comp is optional for very small employers with 1 or 2 employees, which may apply to some self-employed plumbers or tiny firms. Firms with more than 2 employees must carry comp insurance in Oklahoma.

The vast majority of plumbers are required to carry workers’ compensation insurance on their staff in nearly every state. Only a small subset of solo self-employed plumbers or micro firms may potentially not be required in Texas and Oklahoma depending on size. However, even in these two states coverage is still highly recommended to avoid lawsuits. Every other state mandates workers’ comp.

What Does Workers’ Comp Insurance Cover for Plumbers?

Workers’ compensation insurance policies are designed to accomplish two things if an employee is hurt while working:

  1. Pay the employee’s medical bills and directly related expenses. This includes hospital fees, physical therapy, doctor visits, prescription medications, medical equipment, home health care, and any other medical costs stemming from the work injury. There are no caps or limits on the amount of medical coverage provided.
  2. Reimburse a portion of the employee’s lost wages while they recover. The specifics on wage reimbursement percentages and duration limits depend on individual state laws. Most states cover around 2/3 of the employee’s average wages up to state maximums.

Additional benefits covered may include:

  • Death benefits for surviving dependents if an employee passes away due to a workplace injury or illness. Most states provide both burial costs and wage replacement.
  • Vocational rehabilitation to help injured employees transition back to work or train for a new occupation if they cannot continue plumbing work due to permanent disability.
  • Mileage reimbursement for trips to doctor appointments and medical facilities.

Workers’ compensation is intended to cover all reasonable and directly related medical, rehabilitative, and wage replacement costs to help the injured employee fully recover and get back to work if possible.

It’s important to understand workers’ compensation insurance only applies to injuries occurring within the scope of employment. Key exclusions to be aware of include:

  • Injuries occurring outside of work hours or off company premises. There must be a clear connection to work duties.
  • Pre-existing health conditions that are aggravated or exacerbated by work activities. The injury itself must arise out of employment.
  • Intentionally self-inflicted injuries such as suicide attempts and self-harm activities.
  • Injuries occurring when an employee violates policy such as fighting, committing crimes, or intoxication at work.
  • Ordinary diseases of life like colds, flu, allergies etc. that are not caused solely by work duties.
  • Gradual hearing loss or repetitive motion injuries that occur slowly over time. These may be disputed by insurers.

Any gray areas or disputes will be evaluated on a case-by-case basis. But in general, workers’ compensation insurance covers only identifiable injuries resulting from the employee’s job duties. Other key coverages like health insurance help fill gaps that workers’ comp does not address.

Workers’ compensation provides important benefits for injured plumbers. Most states require even small plumbing businesses to carry this insurance. Understanding how premiums are calculated is essential to control expenses.

Premiums are determined using key factors in a formula. Looking at how these elements impact plumbing premiums can help manage costs.

Classification Code and Base Rate

Plumbers fall under classification code 5183, with an associated base rate per $100 of payroll reflecting occupational risk. The National Council on Compensation Insurance (NCCI) assigns codes and recommends minimum/maximum base rates, but final rates are set by each state.

For example, NCCI may propose a base rate of $3.39 for plumbers, but an individual state could adjust this to $3.15 or $3.68 based on local data. Higher risk jobs have elevated rates, while lower risk occupations have reduced rates. Plumbing is considered relatively high-hazard.

Experience Modification Rating (EMR)

The experience modification rating (EMR) also significantly impacts premiums. The EMR uses past claims data to project future likelihood of losses. New plumbing businesses have an EMR of 1.0 representing industry average claim frequency.

Higher EMRs indicate more risk, increasing premiums. Lower EMRs reflect safer history and decrease costs. Controlling EMR factors is key for plumbing companies to reduce expenses.


Estimated or reported payroll by class of employee affects premiums too. Rates are per $100 of payroll. Payroll captures compensation over a set period, normally the prior year. Regional pay differences lead to varying premium costs.

Accurately classifying and reporting payroll is crucial. Office staff may have lower rates than plumbers with higher on-the-job risk. Detailed payroll records prevent overpaying premiums.

Premium Calculation Formula

These elements are used to calculate premiums as:

Premium = Base Rate x EMR x (Payroll / 100)

Higher base rates, EMRs, and payroll mean greater workers’ comp costs. Controlling these key variables allows plumbers to lower premium expenses.

Plumbing Risks Increasing Workers’ Comp Premiums

The hazardous nature of plumbing generates high workers’ comp premiums. Common risks include:

  • Lifting heavy equipment causing back injuries
  • Falling from ladders or slippery surfaces
  • Exposure to sewage, chemicals, gases, lead, asbestos, and mold
  • Cuts from sharp tools and materials
  • Strains from bending, crouching, overhead work, and vibrating tools
  • Respiratory issues from cramped spaces and poor ventilation
  • Water damage leaks causing slips or electrocution
  • Driving accidents traveling to job sites

These inherent plumbing dangers mean more frequent and serious claims. As a result, plumbers have elevated experience ratings and base rates, increasing premium costs. Focusing on safety is critical to better manage risks.

EMR Impact on Plumbers’ Premiums

As a major input in premium calculations, the EMR can substantially affect plumbing costs. For example, a company with:

  • $850,000 Estimated Payroll
  • Base Rate of $3.39

Scenario 1: EMR of 0.90
Premium = $3.39 x 0.90 x ($850,000 / 100) = $25,956

Scenario 2: EMR of 1.15
Premium = $3.39 x 1.15 x ($850,000 / 100) = $33,094

The 0.25 EMR difference adds $7,138 in annual premiums. Careful EMR management is key for plumbers to control premium expenses.

Workers Compensation Premium Calculator for Plumbers

To estimate your potential workers’ compensation premium costs based on your plumbing business’ unique parameters, use our interactive Plumber Premium Calculator:

By inputting key variables like your estimated annual payroll, employee class codes, your current or projected EMR, and growth estimates, the calculator will generate an indicative premium range you can expect based on typical rating formulas and industry benchmarks.

This allows plumbers to model different payroll, EMR, and classification scenarios to understand how policy variables and risk management impact potential premium costs. Comparing the calculator’s rate estimates against actual quotes from insurance carriers can help you negotiate the optimal workers’ comp policy rate for your business.

Keep in mind projections are estimates only, and you should validate all policy details with insurance providers before purchasing coverage. But using the Plumber Premium Calculator gives you a powerful starting point to forecast and control workers’ comp costs based on your firm’s risk profile.

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Comparing Workers’ Comp Rates for Plumbing by State

In addition to individual risk factors, the state where a plumbing contractor operates can greatly impact workers’ compensation costs. Each state oversees its own workers’ comp system with distinct regulations, base rates, benefit requirements, and cost drivers.

Some states have much higher workers’ comp premium multipliers across all trades, leading to major price differences even between similar plumbing contractors. For companies working in multiple states, recognizing and accounting for these state-by-state differences is vital for insurance planning and cost control.

Below we’ve put together approximate cost ranges by state for both plumbing employees and per $100,000 in payroll, based on typical premiums using Code 5183 for plumbers:

Table 1 – Typical Workers’ Compensation Premium Cost per Plumber Employee

StateTypical Cost of WC per Employee
District of Columbia$7,090
New Hampshire$10,660
New Jersey$21,330
New Mexico$9,180
New York$13,840
North Carolina$6,770
North Dakota$3,650
Rhode Island$12,530
South Carolina$7,700
South Dakota$6,950
West Virginia$2,850

Table 2 – Typical Workers’ Compensation Premium Cost per $100K in Plumbing Payroll

StateTypical Cost of WC per $100K payroll
District of Columbia$2,300
New Hampshire$3,800
New Jersey$8,700
New Mexico$3,900
New York$4,500
North Carolina$2,800
North Dakota$1,500
Rhode Island$4,100
South Carolina$3,200
South Dakota$2,800
West Virginia$1,500

Can Plumbers be Classified as Contractors for Comp?

Attempting to misclassify plumbers under lower risk contractor codes constitutes fraud. Insurers assign classification 5183 specifically for plumbers based on duties. Payroll audits review actual work activities and will uncover misclassifications. This could prompt penalties.

For companies with separate plumbing and contracting staff, it may be appropriate to split classes based on exposures. But plumbers performing plumbing tasks will likely remain class 5183 during audits due to hazardous trade work.

How to Reduce Plumbers Workers Comp Premium Costs

Controlling workers’ compensation premiums is vital for plumbers since it greatly impacts overhead. Effective cost reduction strategies include:

  • Preventing injuries through robust safety programs and an accountable culture
  • Maintaining accurate records for precise audits and payroll reporting
  • Improving experience modification factors by managing past claims and preventing future incidents
  • Partnering with risk experts to maximize savings and avoid overpayment
  • Contesting incorrect premium billings immediately
  • Researching self-insurance or group plans to reduce rates
  • Comparing insurers regularly to find optimal premiums

Even small changes like tighter safety protocols, detailed payroll tracking, and working with advisors can significantly reduce expensive workers’ comp costs. The most impactful approach is focusing on safety to prevent workplace injuries and incidents, which directly lowers premiums over time. Learn more about how plumbers can reduce workplace hazards and workers compensation claims.

How Can Plumbers Get Tailored Workers’ Comp Insurance?

The workers’ compensation system can be complex to navigate with strict state and federal regulations. Mistakes in classification codes,Experience Mod calculations, and reporting claims can be very costly.

When seeking coverage, partnering with insurance specialists focused on the plumbing trades is highly recommended. Avoid a one-size-fits-all policy from an insurance carrier’s website or call center.

Some key benefits of using plumbing trade specialists include:

  • Access to top regional and national insurers familiar with plumbing risks who actively write these policies for plumbers. Captive plumbing insurance agents only work with select carriers.
  • Compliance expertise to steer you clear of violations and help manage claims appropriately. Confidently handle audits. Mistakes lead to fines.
  • Potential access to plumbing trade association plans not available to the general public. Group plans through PAM, PHCC, ACCA, PCA etc. can offer discounted rates.
  • Policy customization based on your unique mix of employees. Classifying payroll correctly optimizes your rate.
  • Bundle discounts when pairing workers’ comp with general liability and other coverages. This lowers insurance overhead.
  • Risk management guidance like job site assessments, OSHA advice, and safety program creation. Lower risks lead to lower premiums.
  • Claims assistance including investigation, directing medical care, coordinating return to work and settlement. Leave the paperwork to the experts.

The right insurance partner takes the burden of handling complex workers’ compensation requirements off your shoulders. This allows you to focus on plumbing rather than insurance administration. Avoid roadblocks to smooth operation.

Get Plumbers Workers Compensation Quotes from ContractorNerd

Do you need to get workers compensation insurance for your plumbing business? Getting quotes can be a headache, but ContractorNerd makes it easy.

Our online quote tool allows you to get customized workers comp quotes for your plumbing company in minutes. Simply provide details about your business like payroll, employee classifications, and past loss history. Our system will instantly compare quotes from top insurance carriers.

The quotes we provide come with no obligation so you can evaluate multiple options. Once you select a policy, our licensed experts handle the application and setup process to get your business insured quickly.

With ContractorNerd you can:

  • Get side-by-side quotes from leading workers comp carriers
  • Customize your policy limits and terms
  • Add optional coverages like employer’s liability
  • Bundle with other business insurance policies
  • Speak to a plumbing insurance specialist for advice

Don’t waste time shopping for insurance on your own. Let ContractorNerd make getting workers comp easy! Get obligation-free quotes now to protect your employees and stay compliant with state laws.