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Plumbers are business like any other, and are exposed to the same risks of loss or damage to their assets, reduction in earnings and liability to employees and other parties.

Likewise, the insurance protection offered to plumbers is the same as to other construction trade businesses, primarily being:-

  • Material Damage/Business Interruption
  • Contractors ‘All Risks’
  • Owned/Hired Plant
  • Employers Liability
  • Public Liability
  • Motor

Material Damage and Business Interruption are covers that need to be considered by plumbers that operate from business premises, whether owned or not, and will normally be covered by the same policy. Typically, Material Damage covers loss or damage to the assets of the business whilst at the premises named in the policy for sums insured chosen split between buildings, contents and stock. The cover for buildings and contents will be on a ‘Reinstatement’ basis (‘new for old’) and the sums insured must reflect this basis of valuation, and not ‘book value’, in order to avoid a valid claim being reduced due to underinsurance. Stock requires a sum insured based on a ‘Replacement’ cost basis, and should reflect the largest value of stock held at any one time. Business Interruption covers the loss of earnings and/or increased costs incurred following an insured Material Damage loss. Business Interruption can be covered on a Loss of Gross Profit basis or, and commonly for construction trades like plumbers, on an Increased Cost of Working only basis as the revenue of the business is not dependent upon the business premises and loss or damage at the insured premises will result in increases to the operational costs of the business rather than a revenue reduction.

Contractors ‘All Risks’ covers loss or damage to site works until handover and temporary site structures. The sum insured should represent the largest contract value and the contract period should be adequate to cater for the longest contract. In contract negotiations it is important to check the existence of other Contractors ‘All Risks’ insurance, especially if working as a sub-contractor, as the employer or main contractor may have their own cover to protect their interests. If there is other insurance in place, details of the cover should be obtained to ensure the terms and conditions of the cover are understood and complied with.

Owned/Hired Plant covers the loss or damage to owned constructional plant and the contractual liability arising from loss or damage to hired plant. Typically, owned plant will be covered on a ‘Reinstatement’ basis (‘new for old’) basis for plant up to specified age (usually 12/24 months) with older plant being covered on an Indemnity (basis value after taking into account age and condition), but the sum insured should reflect the ‘Reinstatement’ value of all plant irrespective of age, unless agreed otherwise with the insurer, in order to avoid a valid claim being reduced due to underinsurance.  Hired Plant cover  requires a limit of indemnity that reflect the basis of cover offered, which could be either on an ‘Any One Item’ basis or ‘Any One Loss’ basis where aggregation of multiple items of plant will need to be considered. Hire contracts will normally make the hirer responsible for continuing hire charges in the event of loss or damage to the plant, which should be included as standard by a Hired Plant cover but the limit of indemnity and indemnity period should be checked to ensure they are both adequate to cater for the largest loss.

Employers Liability is a legal requirement where there are employees and covers the employers’ legal liability for death, injury or disease to employees arising out of the course of the business. The standard limit of indemnity is £10M any one claim, costs inclusive and  cover is on a ‘claims occurring’ basis, i.e. the policy that meets a claim is the policy in force when the claim occurs irrespective of when the claim is actually made.

Public Liability covers the legal liability for injury to third parties and damage to third party property arising out of course of the business. There is no standard limit of indemnity, with typical limits of indemnity offered by insurers of £1M, £2M and £5M, but different and higher limits are available, with cover on a ‘claims occurring’ basis. Contracts can impose a minimum limit of indemnity which will need to meet to comply with the requirements.

Motor cover is dependent upon the type vehicle, either car or commercial vehicle, but the covers are broadly the same and can be on a Comprehensive, Third, Party, Fire and Theft or Third Part Only basis. The basic cover is Third Party Only which covers the legal liability for injury to third parties and damage to third party property arising out of the use of the vehicle but provides no cover for any loss or damage to insured vehicle itself. Third Party, Fire and Theft cover extends Third Party Only cover to include loss or damage to the insured vehicle by fire or theft only. Comprehensive cover extends Third Party, Fire and Theft to include other accidental damage to the insured vehicle along with some ancillary covers such as windscreen and personal effects.