If you run a plumbing business, you've probably heard about Business Owners Policies—or BOPs—but wondered if they're actually worth it. Here's the truth: for most small to mid-sized plumbing contractors, a BOP is one of the smartest insurance moves you can make. Instead of juggling multiple policies and trying to figure out what you need, a BOP bundles the essentials into one package. And the best part? You'll usually save money compared to buying everything separately.
Think of it this way: you're covered when a customer claims you damaged their property during a job, and you're also protected if someone breaks into your office and steals your expensive pipe cameras and drain snakes. That's the power of a BOP—it handles multiple risks with one policy.
What Exactly Is a BOP for Plumbing Contractors?
A Business Owners Policy combines two essential coverages that nearly every plumbing contractor needs: general liability insurance and commercial property insurance. Some policies also throw in business interruption coverage, which can be a lifesaver if disaster strikes.
General liability covers you when someone gets hurt or their property gets damaged because of your work. If you're installing a water heater and accidentally flood a customer's basement, your general liability steps in to handle the claim. Commercial property insurance protects your physical assets—your tools, equipment, office furniture, and inventory. If a fire tears through your shop or thieves break in and clean out your work vans, this coverage helps you replace what you lost.
Business interruption coverage is the hidden gem in many BOPs. Let's say that fire forces you to close your shop for two months while you rebuild. You're not earning money, but rent, loan payments, and other bills don't stop. Business interruption coverage helps replace that lost income and covers ongoing expenses while you get back on your feet.
When Does a BOP Make Sense for Your Plumbing Business?
Not every plumbing business qualifies for a BOP, and honestly, not every business needs one. Insurance companies typically have eligibility requirements, and understanding them helps you figure out if this is the right choice for you.
Most insurers set the bar at fewer than 100 employees and less than $1 million in annual revenue for plumbing contractors. If you're running a small crew doing residential service calls or commercial plumbing projects, you're probably a perfect candidate. However, if you've grown into a larger operation with multiple teams and substantial revenue, you might need a customized commercial package policy instead.
The sweet spot for BOPs? You're the owner with a small team, maybe two to ten employees. You've got an office or shop where you store equipment. You do a mix of residential and light commercial work. You carry valuable tools and inventory worth protecting. If that sounds like you, a BOP probably makes solid financial sense.
What Does a BOP Actually Cost?
Here's where things get interesting. The average BOP for a plumbing business runs about $160 to $166 per month—roughly $1,920 to $2,000 annually. That might sound like a chunk of change, but here's the kicker: buying general liability and commercial property separately typically costs more.
For example, general liability alone can run around $363 per month for plumbing contractors. Add commercial property coverage on top of that, and you're easily paying more than what a bundled BOP costs. That's why insurers often quote savings of 10-15% when you bundle—they want your business, and they reward you for simplifying things.
Your actual premium depends on several factors. Location matters a lot—a plumber in New York might pay around $628 for the same coverage that costs $455 in North Dakota. The value of your tools and equipment plays a huge role too. If you've invested heavily in hydro-jetting equipment, video inspection cameras, and specialized tools, expect higher premiums. How many employees you have, your claims history, and even the type of work you do all influence what you'll pay.
Plumbers working in riskier environments—think high-rise commercial buildings or hazardous material situations—will see higher rates than those doing routine residential service calls. Past insurance claims can bump up your premium too. The good news? Shopping around can reveal significant price differences. Some plumbers report annual costs as low as $4,590 with certain carriers.
What Coverage Limits Should You Expect?
Most BOPs for plumbing contractors come with standard liability limits of $1 million per occurrence and $2 million aggregate. That means the policy will pay up to $1 million for a single claim, and up to $2 million total for all claims during your policy period. For many small plumbing businesses, these limits provide solid protection.
Commercial property coverage limits depend on what you're insuring. You'll need to tally up the replacement value of everything—your tools, equipment, office furniture, inventory, even cleaning supplies. Be honest about this. Underinsuring means you won't get fully reimbursed if disaster strikes. Overinsuring means you're wasting money on premiums.
Some contracts—especially for commercial plumbing projects—might require higher liability limits. If that's your situation, you can usually increase your BOP limits or add an umbrella policy on top for additional protection.
What a BOP Doesn't Cover
This is important: a BOP isn't a magic bullet that covers everything. There are some significant gaps you need to know about.
Professional liability (also called errors and omissions insurance) isn't included. If you give a customer bad advice that costs them money, or you make a mistake in your work that doesn't cause physical damage but results in financial loss, you need separate professional liability coverage.
Workers' compensation is another big one. If you have employees, most states legally require you to carry workers' comp. It covers medical bills and lost wages if someone on your team gets hurt on the job. You'll need a separate policy for this.
Commercial auto insurance also isn't part of a BOP. Your work trucks, vans, and vehicles need their own commercial auto policy. If you or an employee gets into an accident while driving to a job site, your personal auto insurance won't cut it—you need commercial coverage.
Some BOPs also exclude certain types of water damage claims or pollution-related incidents. Read your policy carefully and talk to your insurance agent about any exclusions that might affect your specific type of plumbing work.
How to Get Started with a BOP
Shopping for a BOP doesn't have to be complicated. Start by getting quotes from at least three different insurers. Prices can vary dramatically—we're talking thousands of dollars in annual premium differences for the same coverage.
When you request quotes, have this information ready: your business revenue, number of employees, value of equipment and inventory, business location, years in operation, and claims history. The more accurate you are upfront, the more accurate your quotes will be.
Don't just look at price. Read what's actually covered and what's excluded. Ask about deductibles—a lower premium might come with a higher deductible that could hurt if you need to file a claim. Find out if business interruption coverage is included or if it costs extra.
Consider working with an independent insurance agent who specializes in contractor coverage. They can compare multiple carriers at once and help you understand the fine print. They'll also know which insurers are most competitive for plumbing businesses in your area.
Bottom line? If you're running a small to mid-sized plumbing contracting business, a BOP offers solid, comprehensive protection at a reasonable price. It simplifies your insurance portfolio, saves you money compared to buying policies separately, and gives you peace of mind knowing you're covered for the most common risks you face. Just remember to fill in the gaps with workers' comp, commercial auto, and any other specialized coverage your business needs. That combination gives you the complete protection package every plumbing contractor should have.
