Water treatment companies are fraught with risks.
They provide a vital service directly impacting public health and work with dangerous chemicals that can harm workers, customers, their properties, and the environment.
These factors expose water treatment companies to potential claims related to injuries, accidents, health issues, and environmental damage.
Regardless of your company’s size, having an insurance policy to protect your business from the financial burden of such claims is essential.
Below, we’ll look at the various benefits of having an insurance policy and the type you should have. We’ll also explore using ServiceTitan to limit your risk exposure and get all the information you need to file claims.
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What is Water Treatment Business Insurance?
Water treatment business insurance is a legal contract between your business (the insured) and an insurer (the policyholder or underwriter). This agreement protects your company financially from unexpected events such as accidents, property damage, employee work-related chemical exposures, and lawsuits.
The insurance policy spells out its scope, the specific amount you’ll pay periodically (the premium), and the conditions or events the policy covers.
For example, say you bought a general liability insurance policy, and a work-related chemical spill damages the customer’s property.
The insurance company will cover the cost of repairing or replacing the property and any potential legal or settlement fees to the extent set out in the policy’s terms and conditions.
An insurance plan is crucial to risk management, as it protects your company from financial losses that can destroy it.
Why Do Water Treatment Businesses Need Insurance?
In most states, having a water treatment insurance policy is mandatory to keep operating and avoid hefty fines. However, beyond that, insurance policies provide liability coverage for your business so you can manage without fear.
Here are other reasons for having water treatment insurance.
Worker injury coverage
Unfortunately, water treatment techs, like construction workers in general, are not immune from work-related injuries and illnesses. This can leave you with medical expenses, compensation, and reimbursements to cover.
Water treatment insurance programs often cover medical payments, workers' compensation, and rehabilitation costs for job-related accidents.
Property coverage
Wastewater treatment projects often require strong chemicals and heavy machinery, multiplying the possibility of client property damage.
An insurance policy can help cover the cost of repairing or replacing such property. This protects your balance sheet and allows you to focus on delivering quality services without worrying about the looming possibility of hefty property damage costs.
Environmental damage coverage
Water treatment companies typically use chemicals that expose them to environmental damage claims, such as groundwater contamination. Such claims are sometimes large enough to bankrupt the company.
Luckily, environmental liability insurance products protect you financially from unforeseen environmental damage claims caused by your operations. The insurance company handles settlement and legal defense costs—partially or in total—so you keep operating.
Equipment coverage
Unforeseen circumstances, such as equipment theft or damage, can ground your business operation, especially if you don’t have the money to repair or replace the lost items quickly.
An insurance policy with equipment damage coverage lets you quickly fix or replace machines so you remain operational and keep generating revenue.
Proof of professionalism
Customers view water treatment businesses with insurance coverage as trustworthy, credible, and reliable.
An insurance policy shows you’re prepared for risk and committed to ethical business practices. It also assures customers that you can cover costs arising from unforeseen events such as accidents and medical emergencies.
This assurance makes it easy for customers to entrust you with the vital responsibility of water treatment, which directly impacts their health and safety.
Business protection
Settlement and legal fees from damage claims can strain your business financially, potentially shutting it down.
Insurance coverage protects you against financial loss so your business’s balance sheet recovers quickly from lawsuits and settlements.
What Types of Insurance Do Water Treatment Businesses Need?
Take a look at insurance policies tailored to the unique needs of water treatment companies.
1. General liability insurance
General liability insurance covers third-party (non-employees) personal and bodily injuries and property damage caused by your operation. It also covers injuries that occur on your company’s premises.
Every water treatment company is supposed to have a general liability policy, as it’s often a mandatory requirement for licensing, commercial leases, and signing customer contracts in various jurisdictions.
Examples of incidents covered by a commercial general liability insurance policy include:
Water system installation errors.
Work-related customer injuries.
The cost of replacing or repairing properties damaged during the project.
Remember that general liability insurance only covers accidental damages, not intentional ones. For example, it wouldn't pay for water contamination caused by an employee deliberately damaging equipment.
2. Worker's compensation insurance
A worker’s compensation insurance policy pays healthcare, cash, and payroll benefits to employees who suffer work-related injuries or illnesses. It also sometimes pays benefits to family members of employees who die on the job.
Once an employee receives the compensation, they sign away the right to sue the company for damages.
Every state in the United States—except Texas—mandates employers to have worker’s compensation insurance pegged at a specific amount. Consult your state’s Workers’ Compensation Board and NFIB’s guide to confirm the amount required by law in your jurisdiction.
3. Commercial auto insurance (if applicable)
Commercial auto insurance is for companies with vehicles—company cars, excavators, trucks, work vans, etc.
This type of insurance pays for repairs and medical costs incurred in an accident involving the company's vehicles. The costs fall under liability or collision coverage.
Liability coverage pays for medical costs and repairs of the other driver. Collision coverage pays for the medical and repair costs of the employee and the company’s car involved in the accident.
Commercial auto insurance also covers:
Vehicle damage resulting from theft, vandalism, or adverse weather events.
Property damaged by the company’s vehicles.
Medical bills and bodily and personal injury claims resulting from accidents.
Company vehicle damage caused by collision with uninsured or underinsured third-party cars.
Rental costs for vehicles temporarily replacing company vehicles that were taken for repairs.
Commercial auto insurance does not extend to accidents caused by employees without a driver’s license.
4. Commercial property insurance
Commercial property insurance covers the value of the company’s properties—inventory, office space, machinery, and water treatment tools. This protects the company from the financial risk of fires, vandalism, and natural disasters.
The premium for a commercial property insurance policy largely depends on the exposure of a property’s location to adverse weather conditions. For example, a water treatment company in a wildfire-prone area like California will pay more than one in Maryland or Ohio.
Other company property that a commercial property insurance policy can cover include:
Business records and essential company documents
Rented water treatment equipment and tools
Water treatment chemicals
5. Umbrella liability insurance
Imagine a court mandates you pay a claim of $1 million to homeowners for corroded pipes and property damage traced to your overapplication of corrosives such as chlorine. However, your insurance policy only covers $500,000. So, you have to pay the excess from your personal savings and company asset sales.
Umbrella liability insurance policies help prevent such situations by covering extra costs beyond your policy limit. It serves as a backup to other types of insurance, except commercial property insurance or professional liability insurance.
6. Pollution liability insurance
This insurance policy protects and covers water treatment facilities from third-party and first-party claims resulting from pollution caused by the company’s operations. The claims could be from property damage, health issues, environmental damage, and bodily injury.
Pollution liability also pays for emergency healthcare and clean-up costs arising from the pollution caused by your company.
7. Professional liability insurance
Even the most seasoned professionals can make unintentional errors, no matter how experienced or meticulous they are. However, the consequences of these mistakes can be significant: suits, hefty settlements, and costly legal fees.
Professional liability insurance protects against negligence claims arising from unintentional and professional errors, such as improper installations and equipment malfunctions. The insurance policy pays for the settlement costs and legal fees arising from the civil suit, including the cost of redoing the work.
However, professional liability insurance doesn’t cover financial costs caused by subcontractors or intentional errors.
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How Much Does Water Treatment Insurance Cost?
Water treatment insurance can cost between $58 and $69 per month or $696 and $1,080 yearly, exceeding the premium low-risk businesses pay. Generally, the amount you’ll pay depends on your:
Company’s location and service area size: Companies operating in areas with a higher risk of natural disasters, theft, and vandalism may pay higher insurance premiums due to the increased likelihood of claims in these locations.
Claims and business history: Companies with a clean history, meaning they haven't filed many claims, typically enjoy lower premiums. Insurance companies view such companies as lower risk, leading to more competitive rates.
Conversely, companies with a track record of frequent claims and accidents will likely pay higher premiums due to the increased risk they pose to the insurer.
Employee headcount: Large water treatment companies with many employees have more risk exposure, increasing their premiums. Conversely, companies with a small headcount have less risk and pay less.
Total annual wage bill: Insurance premiums are usually calculated as a specific amount per $100 of your company's payroll. The greater the payroll, the larger the premium.
Water treatment services: Companies offering complex water treatment services involving hazardous chemicals incur higher premiums. Companies serving large and sensitive commercial buildings, such as hospitals, also have higher premiums than residential firms.
Policy limits: This is the maximum amount an insurance company will agree to pay for a claim. Higher policy limits require higher premiums.
To reduce your premium, contact an experienced insurance agent or broker. Then, explain your company’s risk profile, history, desired coverage level, and day-to-day operations so they can help you get favorably-priced insurance plans.
How Water Treatment Software Gives You Added Protection
Beyond having the right water treatment insurance, having a well-updated and accurate record of business operations helps protect your company.
Using software to automate operations and enhance communication between back-office staff and technicians minimizes human errors and mistakes, letting you focus more on growing your business.
For example, Puragain Water used ServiceTitan to automate processes, leading to a 1,011 percent increase in revenue in three years.
“I can't tell you how much it's streamlined (operations),” says Chris Nelson, Puragain’s national sales manager.
“It's really made it to the point where it's easy for us to go to that next level and open up these new stores, keeping things organized from how they're able to do the different business units for each state, but all still be integrated into one.”
ServiceTitan's Customer Experience software’s call-recording feature automatically saves customer call recordings, which field technicians can access from their mobile tablet.
This helps technicians understand the customer's issue, reducing the risk of disputes that can result in legal issues. You can also use the call recording to verify information and resolve disputes about what issue was reported.
Furthermore, having a record of the correct information reduces the risk of professional errors.
ServiceTitan’s Customer Experience software also allows on-field techs to send real-time updates to the office, facilitating up-to-date records for defending against lawsuits and claims.
Furthermore, ServiceTitan's cloud-based Water Treatment Field Reporting software makes gathering any information you need to file insurance claims easy. You can track every truck, revenue growth, and the performance of your technicians and support staff across different KPIs (key performance indicators) from anywhere in the world.
Finally, ServiceTitan's Service Scheduling software helps water treatment companies plan their job schedules weeks and months in advance and monitor technicians’ availability.
The software allows front office staff to flag jobs requiring special tools, technical ability, and language proficiency. This ensures techs have the right tools, expertise, and competency to handle each job.
How Do I Choose the Best Insurance Provider for my Water Treatment Service?
Besides picking an insurance plan, the right provider is crucial as they protect your business and advocate for your interests.
Here are some tips for picking the right insurance provider:
Analyze your business: Outline your company's size, headcount, services, and liability exposure. This will ensure you pick an insurance provider knowledgeable about the type of insurance policies you need.
Consult an insurance agent: Find an insurance agent who specializes in or has experience with water treatment policies. They can help you pick the right insurance policies, explain their scope, and pick a provider offering the best coverage at manageable rates.
Shop around and compare quotes: Scrutinize the offers of different insurance companies before you pick one with the best rates and desired coverage levels. Ask business owners who run companies of a similar size to yours for suggestions based on their insurance arrangements.
Scrutinize each policy's guidelines: Before purchasing an insurance policy, always read and understand the terms and conditions—deductibles, coverage limit, exclusion, premium, etc.
Regularly review and update your insurance: Your risk and insurance needs increase as your business grows. Periodically review your policy and ensure it offers adequate coverage for your business at the best rates.
Pro tip: To save costs, consider purchasing bundled insurance packages that offer more coverage for less money.
The Bottom Line
Although it seems like a considerable expense, an insurance policy's risk protection makes it a wise investment for every business.
It protects your company and personal assets from financial risks and safeguards your customers from losses due to accidents and property damage.
Ensure you pick an insurance policy that matches your business’s needs.
You should consider using water treatment software like ServiceTitan to reduce your company’s risk exposure and easily track inventory and performance.
ServiceTitan is a cloud-based tool water treatment companies use to automate business operations and boost revenue. Over 100,000 contractors nationwide use it.
ServiceTitan Water Treatment Software
ServiceTitan is a comprehensive water treatment business software solution built specifically to help service companies streamline their operations, boost revenue, and achieve growth. Our award-winning, cloud-based platform is trusted by more than 100,000+ contractors across the country.
