In 2024, the average workers' comp rate for plumbers is $2.19 per $100 of payroll. This insurance covers work-related injuries or illnesses that happen on the job, protecting your employees and your business.
What is the Plumbing Workers' Comp Premium based on?
Your exact workers' comp premium depends on a few key factors, such as:
Your Industry
Workers' comp costs vary by industry depending on the level of risk involved. The National Council on Compensation Insurance (NCCI) assigns a four-digit class code to every type of job. Each class code is also assigned a risk level based on how likely workers in that industry are to get hurt and how severe those injuries might be.
Higher-risk industries like construction or plumbing tend to have higher workers' comp rates compared to lower-risk industries like office-based jobs.
Most plumbing businesses are classified under class code 5183, which covers the installation and repair of water, gas and steam systems, including lawn irrigation systems.
If your business focuses on indoor automatic sprinkler systems, you would fall under class code 5188, which has a lower risk level and lower rates.
For more details, check out our Guide on Plumbing Workers’ Comp Codes.
Your Payroll
Your premium is calculated based on your total payroll. The more employees you have, the higher your premium, because more workers mean more potential for accidents.
Claims History
A history of frequent accidents or injuries will increase your premiums. On the flip side, if your business has fewer claims, you may benefit from lower rates over time.
How are Plumbing Workers' Comp Premiums calculated?
Here’s a simple formula to calculate your workers' comp premium:
Payroll divided by 100 x rate = Premium
Step 1: Calculate the Payroll
Determine the total annual payroll for all plumbing employees.
If you don't have the annual numbers, calculate each employee's hourly rate multiplied by their weekly hours and the number of weeks worked per year.
Step 2: Find your Rate
Find the workers' comp rate for your industry and state:
- Use the national average: Code 5183 is $2.19.
- Check your existing policy for rate details.
Example Calculation
Imagine you own a plumbing business in Mississippi. You have six plumbers and one office employee. You, as the business owner, are excluded from coverage.To ensure your business and employees are protected, you need a plumber’s workers’ comp policy.
Here’s how to calculate your premium:
1. Calculate Payroll
Note: You should combine the payroll of employees who do the same type of work.
- Each plumber’s annual pay is $30/hour x 40 hours/week x 52 weeks = $62,400 per plumber.
- With 6 plumbers, the total payroll for your workers is $62,400 x 6 = $374,400.
- The office employee earns $19/hour x 40 hours/week x 52 weeks = $39,520 in payroll.
2. Find your Workers' Comp Rates:
- Your plumbers fall under class code 5183 with a Mississippi rate of $2.07.
- Your office employee falls under class code 8810 with a rate of $0.19.
3. Apply the Formula
For the plumbers (class code 5183):
- Total Payroll is $374,400
- $374,400 (payroll) ÷ 100 x $2.07 (industry rate) = $7,751
For the office employee (class code 8810):
- Payroll = $39,520
- $39,520 (payroll) ÷ 100 x $0.19 (industry rate) = $75
Combine both for a total annual premium $ $7,751.28 + $75 = $7,826.
This is an estimate and could vary based on additional factors like state regulations and discounts.
Annual Cost of Workers' Comp for 5183 Plumbers
To give you an idea of what you might pay for workers' comp insurance in different states, here’s an example of average costs per employee for a few states.
Does it matter where you buy a Policy?
When shopping for plumbing workers' comp insurance, the price isn’t the only thing that matters. You should also consider the reliability of the insurance company, how quickly they process claims, and their customer service.
Choose a company with a solid reputation and experience in the plumbing industry to ensure your employees get the help they need fast if they're hurt on the job.
What does Workers' Comp Insurance cover?
Workers' comp insurance covers a wide range of work-related injuries and illnesses.
Here’s what it usually includes:
- Medical Expenses: Covers treatment for work-related injuries or illnesses
- Lost Wages: Compensates employees while they recover
- Death Benefits: Provides support for families if an employee dies on the job
- Lawsuit Protection: Protects your business from legal action by injured employees
Tips to lower your Workers' Comp Premium
Want to lower your workers' comp premiums? Here are some tips:
Implement a Safety Program
If your plumbing business involves working with boilers or going underground (for example, if you're trenching to install pipes), you’ll need to follow strict safety regulations.
Make sure your underwriter knows you’re taking steps to prevent accidents, such as installing egress systems (escape routes) to help workers get out of a trench in case of collapse.
Keep your tools in top shape
Regularly inspect and maintain your plumbing tools and equipment to prevent accidents caused by faulty tools.
Check class codes
Make sure all your workers are classified correctly. Incorrect classifications can lead to higher premiums.
Ask about discounts
Some insurance companies offer discounts if your business has a good safety record or a low claims history.
Focus on reducing claims
Fewer claims mean lower premiums over time, so invest in safety measures and training for your employees.
See more Cost-Saving Tips for Plumber’s Workers’ Comp.
Find out your Plumbing Workers' Comp costs
Want to know exactly how much workers' comp will cost for your plumbing business? Use our online tool for a tailored quote and find out how much you could save!
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.
Employment Practices Liability Insurance (EPLI) and Workers' Compensation Insurance both protect businesses from employee-related risks. EPLI, an optional coverage, protects businesses against employee claims such as discrimination, harassment or wrongful termination. Workers' Compensation is mandatory and protects employees who suffer job-related injuries or illnesses, covering medical expenses and lost wages.
