If you’re a plumber, the risk of a costly water damage claim or a utility strike under a footpath can keep you awake at night. You may be asking: does public liability insurance actually cover water damage, gas leaks and damage to underground services?
The short answer is that public liability insurance can respond to third-party property damage caused by your plumbing work — including water escape and accidental damage to underground services — but cover is never automatic. Every policy has terms, conditions and exclusions that determine whether a particular incident is covered. There are also practical risk management steps that can influence how an insurer views your business.
How public liability insurance applies to common plumbing risks
Public liability insurance is designed to protect your business if your work activities cause injury to someone else or damage to their property. In the context of plumbing, that can include:
- Water damage to a client’s home or neighbouring property after a pipe bursts or a fitting fails.
- Damage to underground gas, water, telecommunications or electrical cables when excavating.
- Gas leaks that cause property damage or require emergency services.
Whether a claim is paid will depend on the specific facts, the wording of your policy, and whether you have met your duty of care as a tradesperson.
Typical policy requirements include:
- Faulty workmanship exclusions — Most policies exclude the cost of fixing your own faulty work. If a poorly soldered joint fails and floods a kitchen, the policy may cover the resulting water damage to the kitchen but not the cost of re-soldering the joint.
- Gradual damage exclusions — Damage that occurs slowly over time, such as a slow leak behind a wall, is often excluded.
- Underground service exclusions — Some policies exclude damage to underground services unless you have obtained proper plans and followed safe digging practices.
Underground services: what you need to know
Striking a gas main or fibre optic cable can result in repair bills, regulatory fines and business interruption for the asset owner. Insurers may review whether you:
- Obtained current Dial Before You Dig plans before starting work.
- Followed the information on those plans.
- Used safe excavation techniques, such as hand-digging or vacuum excavation, near marked services.
If you have taken these steps, your insurer is more likely to respond to a claim. If you haven’t, you could be left to bear the costs yourself.
Water damage claims: scope and common exclusions
Water damage is one of the most frequent and expensive claims for plumbers. A burst flexi hose or a failed compression fitting can release hundreds of litres of water in a short time. While public liability insurance can cover the resultant damage to the building and contents, exclusions commonly apply to:
- Damage to the plumbing installation or component that failed (the defective part itself).
- Damage from wear and tear, corrosion or lack of maintenance.
- Consequential financial losses, such as a business shutting down, unless you hold additional covers.
Gas leaks: liability and risk management
Gas leaks present serious safety risks. If your work causes a gas escape that leads to property damage or injury, public liability insurance may respond. However, insurers will expect you to hold the appropriate gasfitting licence and comply with state and territory regulations. Unlicensed work or failure to follow recognised standards (such as AS/NZS 5601) can prejudice your cover.
Demonstrating risk management to insurers
Showing insurers that you take risk seriously can be important when you apply for cover or need to make a claim. Steps that may help include:
- Keeping records of your Dial Before You Buy enquiries and site plans.
- Using checklists and standard work procedures, especially for excavation and pressure testing.
- Documenting all materials and methods used.
- Holding current licences and maintaining ongoing training.
- Photographing work before and after completion.
These practices can support your position if a claim arises and may assist your insurer in defending a claim against you.
Getting help with your insurance
PlumberInsurance provides general business insurance information only. PlumberInsurance is not an insurer, underwriter or insurance broker. PlumberInsurance does not promise premiums, cover, claims outcomes or savings. PlumberInsurance does not provide personal financial advice. All information is general in nature. For specific advice about your business circumstances, consult a qualified insurance broker or authorised representative. Contact PlumberInsurance for an enquiry or referral to appropriately authorised assistance.
General information about business insurance and risk management is also available from business.gov.au.