Foundation repair contracts normally contain a statement similar to the following:
The foundation repair contractor is not responsible for pre-existing plumbing problems, or plumbing damage caused by lifting. The contractor will repair plumbing hit during excavation for pier installation.
To understand why the foundation contractor is not responsible for damage caused during lifting, let’s look at what is going on.

The drawing above shows a typical layout for a sewage line with some of the common leaks that occur. A freshwater line is similarly installed, running horizontally under the slab and then vertically rising to a faucet or other fixture.
As a foundation slowly drops, it pushes the plumbing deeper into the ground. If the plumbing did not get pushed downward, the vertical rising section of the plumbing would pop up through the floor.
In our example drawing above the plumbing is imbedded in sand. Sand enables the plumbing to withstand some movement of the foundation.
Far too often, the builder may have taken shortcuts. Rather than thick, soft sand, the plumbing may be covered with hard, compacted clay soil. The hard soil grips the plumbing and resists the upward movement of the slab. During a foundation lift the plumbing may be put under stress and may crack, resulting in a plumbing leak. There is no way of predicting which house will be effected. Short of not lifting, there is no way of managing the lift to guarantee that damage will never occur.
A foundation contractor has no idea as to whether the plumbing was properly installed in sand, or improperly buried in clay. The job of the contractor is to lift the structure as much as practical. Thus, sometimes a leak will occur.
Should the contractor hit the plumbing during excavation, contact with metal and the resultant leak is typically quickly apparent.
Freshwater leaks following a lift are rare as freshwater lines are rather ductile. Since the water is under pressure, a freshwater leak may be visible quite soon. Sewage leaks are unpressurized and much harder to detect following a lift. Sewage leaks are more common in houses built with rigid, cast iron pipe. By the mid 80′s most city building codes had been amended to require the installation of more flexible PVC pipe for sewage lines.
Since leaks can be detrimental to a foundation and the repair work, a Contractor may require that the homeowner have a licensed plumber test for leaks and perform necessary repairs.