Top 5 Mistakes Plumbing Contractors Make When Buying Business Insurance

Nate Jones, CPCU, ARM, CLCS, AU
Jan 15
2 min read

Buying plumbing business insurance is one of the most important decisions a contractor makes—but it’s also one where costly mistakes are common. Choosing the wrong coverage, underinsuring your business, or focusing only on price can leave you exposed to major financial risks.

Understanding these common mistakes can help you protect your plumbing business properly and avoid gaps in coverage. Below are the top five insurance mistakes plumbing contractors make, and how to avoid them with the help of Wexford Insurance.

Mistake #1: Only Buying the Cheapest Policy

While it’s tempting to focus on price, the cheapest insurance policy often comes with limited coverage, high deductibles, or critical exclusions. If a claim occurs, you may end up paying far more out-of-pocket than expected.

Smart move: Compare coverage details—not just premiums—to ensure proper protection.

Mistake #2: Underestimating Liability Risks

Many plumbing contractors underestimate how easily accidents can happen. Water damage, slips and falls, or accidental property damage can result in expensive claims or lawsuits.

Smart move: Make sure your general liability insurance limits reflect the real risks of your jobs, especially for commercial or high-value properties.

Mistake #3: Skipping Workers’ Compensation Coverage

Some contractors assume workers’ compensation isn’t necessary for small teams or part-time employees. In most states, this coverage is legally required—and skipping it can result in fines or personal liability.

Smart move: Always carry workers’ compensation if you have employees, even if your crew is small.

Mistake #4: Forgetting About Vehicle and Tool Coverage

Service vehicles and tools are essential to plumbing operations, yet many contractors overlook commercial auto insurance or tools and equipment coverage. Personal auto policies typically won’t cover business use.

Smart move: Insure work vehicles properly and protect valuable tools from theft or damage.

Mistake #5: Not Updating Coverage as the Business Grows

As your plumbing business grows—adding employees, vehicles, or services—your insurance needs change. Failing to update policies can create dangerous coverage gaps.

Smart move: Review your insurance annually or whenever your business changes.