Insurance is one of those slightly tedious requirements that you’d probably rather not think about. Annoyingly, despite what you may feel, it is necessary.
But what kind of insurance do you need and how much is it going to set you back?
We will answer this and all your questions in this article.
The only insurance that plumbers are legally required to have is Employers’ Liability Insurance and this only applies to businesses that have employees.
If you operate as a sole trader, then you do not need this insurance, however, there are some exceptions you should be aware of.
If your plumbing business is incorporated into a limited company and you own more than 50% of the shares of that business, then you are required to have Employers’ Liability Insurance.
This is because you are technically considered to be an employee of that company.
Due to the fact that limited companies exist as independent entities in law, this means you could, in theory, make a claim against the company in the event of an accident or injury.
The only instance this wouldn’t apply is if you are not legally considered to be an employee of your company.
If you employ family members in your plumbing business then you may not need Employers’ Liability Insurance.
Assuming you are not operating as a limited company and your family is not at risk when working for your company, then Employers’ Liability Insurance may not be required.
However, in reality, if family members are working in the field, then it is likely insurance will still be needed.
If in doubt contact a qualified legal professional.
If your plumbing business employs contractors or casual workers, whether you need Employers' Liability Insurance will depend on the nature of their contract and how they're classified.
If they are considered to be employees, you will need this insurance, so check their contract carefully.
Even if they are not technically employees of your business, for legal purposes they can still be considered to be ‘deemed employees’. So make sure you do your due diligence.
If in doubt you will probably find that in most instances contractors are considered employees.
If you don’t insure your business when you are legally required to do so, then you can expect to be charged fines of up to £2,500 for every day you are without adequate EL insurance.
There are also other additional personalities of up to £1000 that you may need to pay, plus the potentially hefty bill you’d have to pay if an employee had an accident while working for your company.
The cost of EL insurance will vary significantly depending on the number of employees, the nature of the work being done, claims history, coverage amount and business size.
For a typical plumbing business with 5 employees and no previous claims history you can expect to pay between £500 to £1,500 per year, but check with an insurance provider for an exact quote.
The only insurance plumbers are required to have is Employers’ Liability Insurance and only if their business has employees.
However, it is also recommended to have the following:
While not legally required, Public Liability Insurance is crucial for plumbers.
It covers the cost of claims made by the public (this includes clients) for incidents that occur as a result of your business activities, such as property damage or personal injury.
Given the nature of plumbing work, the potential for accidental damage (e.g., water damage from a pipe fitting gone wrong) makes this insurance essential.
Cost: For a small to medium-sized plumbing business premiums are typically in the range of £250 to £1,000 or more per year.
If you provide professional advice or services, such as consulting on plumbing systems for a new build, this insurance can protect you against claims of negligence or malpractice.
It's particularly relevant if your advice or work results in financial loss for a client.
Cost: Annual premiums generally range from £250 to £1,000.
This covers the cost of replacing or repairing your tools and equipment if they are stolen, lost, or damaged.
Four in five tradespeople have had tools stolen, but only 0.3% of all cases (three cases per 1,000) end in a charge.
Considering this and the high value and essential nature of plumbing tools, this insurance can save you significant money and downtime.
Cost: Typically costs between £100 and £500 annually.
Given that van theft is on the rise with as many as 34,712 thefts occurring back in 2022 this is an insurance package worth thinking about.
Most plumbers need a van or another vehicle to transport tools, equipment, and materials. Having comprehensive vehicle insurance helps protect your business in case you’re the victim of a theft.
This type of insurance is distinct from standard car insurance and covers vehicles used for business purposes.
Cost: As a rough estimate this can cost between £500 and £2,000 per year, per vehicle.
This can provide you with an income if you're unable to work due to an injury or serious illness.
For tradespeople who rely on their physical health to work, this insurance can offer financial stability in case of accidents.
Cost: Approximately £100 to £400 per person per year.
This can cover legal costs that may arise from disputes, such as those with clients or suppliers.
Given the potential for legal disputes in any business, this insurance may be a wise precaution.
Cost: For a standard Legal Expenses Insurance policy you might expect to pay between £100 and £300 annually.
While there is no legal requirement for subcontractors to insure themselves, it is always a good idea to do so. In some instances, it might even be a requirement of the contract the subcontractor is working under.
Always check the terms of your contract before beginning work.
In any case, it is recommended that a subcontractor covers themself with general liability insurance as this will protect them in the case of claims for bodily injury, property damage, or personal and advertising injury that occurs as a result of their work.
Furthermore, insuring yourself helps to improve your professional reputation, showing that you are someone who takes your work seriously.
Yes, in most instances subcontractors will need to pay their own National Insurance. However, this only applies if a subcontractor is considered to be self-employed.
If a subcontractor is on a permanent paid contract with a company, ie they are an employee of that company, then they don’t need to pay their own National Insurance as their employer will take care of it.
However, if a subcontractor is working on a contract as an individual and is getting paid directly by the contractor, then they will need to pay their own National Insurance.
While plumbing contractors are not legally required to have their own insurance, they would be unlikely to be hired if they did not have suitable cover, such as Public Liability Insurance.
In some instances, the company hiring the contractor may have an insurance policy in place that covers its contractors, however, it is likely the individual would still need their own insurance.
As a self-employed gas engineer in the UK, there is no legal requirement for you to insure yourself unless you have employees, however, you may struggle to get work without adequate insurance and you would be putting yourself and your business at considerable financial risk.
Typically you would require the following types of insurance:
Additionally, ensure you are compliant with any specific legal requirements or regulations for gas engineers, such as being Gas Safe registered.
Based on all this best insurance a plumber can get is public liability insurance. This is the minimum necessary insurance that all plumbers and gas engineers should have whether they are self-employed or working for a limited company.
At the end of the day, making sure you are properly insured may seem like an annoying and costly expense, but in the long run, it will save you. At some point, mistakes will be made and having the right insurance in place will protect you and your business from financial trouble.
If You're considering starting your own plumbing business, then we've got you covered in the following article on starting a plumbing business in the UK.
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