Key points
- Underestimated payroll leads to audit bills. Update estimates as you hire.
- Subcontractors without their own coverage can be charged to your policy.
- Your experience modifier rewards good claims history over time.
Hiring is the clearest sign a plumbing company is growing. It’s also the fastest way to outgrow a workers’ compensation policy written for a smaller business. For Texas basics, including the nonsubscriber option, see workers’ compensation for plumbing contractors.
Keep payroll estimates current
Workers’ compensation premiums are generally based on estimated payroll, adjusted by audit after the policy period. If you add five technicians mid-year and don’t update the estimate, expect a large audit bill. Tell your agent when headcount changes significantly.
Classify payroll correctly
Field plumbers, office staff, and outside sales are typically rated in different classifications at very different rates. Keep payroll records that separate them. Misclassification can cost you or create disputes at audit.
Subcontractors
If you use subcontracted plumbers or helpers, collect current certificates of insurance showing their own workers’ compensation. At audit, payments to uninsured subcontractors are commonly treated as your payroll.
Experience modification
As your premium grows, your company’s own claim history begins to influence pricing through an experience modifier. Fewer and smaller claims over time can lower it. Many commercial customers also look at your modifier when selecting contractors.
Return to work
A light-duty or return-to-work program helps injured employees recover and reduces claim costs. It also keeps experienced technicians connected to the company.
Safety basics for plumbing crews
- Lifting equipment and two-person lifts for water heaters and heavy fixtures
- Ladder, attic, and crawl-space safety
- Trench and excavation safety for sewer work
- Eye, hand, and hearing protection for cutting and soldering
- Vehicle safety for technicians who drive all day