Find insurance for Maryland carpenters
Carpenters in Maryland typically need insurance to get licensed, sign contracts, and protect themselves financially. Learn about the most common business insurance policies and when they're required for carpenters.
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What are the most common policies for carpenters in Maryland?
Carpenters may need different types of insurance coverage depending on their unique risks and requirements. These are the top policies that help Maryland contractors comply with requirements and prevent financial losses.
General liability insurance
A general liability policy covers third-party risks, such as a contractor who breaks a window while carrying a board through a home. This coverage is required for licensed Maryland carpenters.
- Slip-and-fall accidents
- Damaged customer property
- Product liability insurance
Workers’ compensation insurance
Maryland requires workers' comp for every carpentry business that has employees. It also protects sole proprietors from work-related medical bills that health insurance might deny.
- Medical expenses from job injuries
- Disability benefits
- Lawsuits from injured employees
Inland marine insurance
This policy helps pay for the repair or replacement of saws, finish nailers, and other tools if they are stolen or damaged at a jobsite. It's also called tools and equipment insurance.
- Power tools and hand tools
- Ladders and scissor lifts
- Personal protective equipment (PPE)
Commercial auto insurance
Commercial auto insurance covers third-party bodily injuries and property damage caused by a carpentry business's vehicle, along with any related legal fees.
- Medical costs if another person is injured
- Repairs to other vehicles or property
- Lawsuits from injured parties
Business owner's policy
A BOP bundles general liability coverage and commercial property insurance at a lower cost than buying the policies separately. It's often the most cost-effective type of insurance for carpenters.
- Accidents that injure clients
- Client property damage
- Damage to your building or its contents
Professional liability insurance
A professional liability insurance policy covers legal costs if a carpenter is sued for a professional mistake or oversight. It's also called errors and omissions insurance (E&O).
- Design errors
- Failure to meet a client's specifications
- Late or undelivered carpentry projects
Which policies are required for carpenters in Maryland?
General liability insurance
General liability insurance protects your carpentry business from the most common third-party lawsuits. Because carpenters often work around other people and on their property, they face a high risk of accidental bodily injuries and property damage.
If your business is blamed for harming someone or damaging their property, this policy will cover medical payments and repair costs, along with legal expenses if the injured party sues. That includes attorney's fees, court costs, and a court-ordered judgment or settlement.
General liability insurance can also pay for lawsuits related to personal injuries and advertising injuries, such as libel, slander, and invasion of privacy. For example, it will pay for your legal defense costs if a competitor sues your business for making a false statement about them on social media.
The Maryland Home Improvement Commission (MHIC) requires home improvement contractors to maintain at least $500,000 in general liability coverage. That includes carpentry contractors, general contractors, and any other contractors who do home remodeling or repairs.
Property owners, general contractors, and clients might ask to see proof of liability insurance before working with you. In addition, any business owner might find they need general liability to sign a commercial lease or apply for a business loan.
To meet requirements for higher limits, you can add excess liability or commercial umbrella insurance to your general liability policy. Umbrella insurance boosts the limits of general liability insurance and other liability policies once the limit is reached on a claim.
Workers' compensation insurance
In Maryland, every business with employees must carry workers' compensation insurance, including carpentry businesses. Sole proprietors aren't required to have workers' comp coverage or apply for an exemption.
Workers' comp pays for medical bills and provides disability benefits during recovery if an employee is injured on the job. Most policies include employer's liability insurance, which covers lawsuits from injured employees.
Carpenters have a high rate of injuries, which is why you should consider buying workers' comp even if it's not required. If you're injured on the job, your workers' comp policy will pay for any medical treatment you need—including ongoing care—and help offset your lost wages.
Commercial auto insurance
Commercial auto insurance covers medical bills, repairs, and legal costs if your carpentry business's vehicle injures someone or damages their property. Depending on the coverage options you choose, it can also pay for vehicle theft, vandalism, or weather damage.
Maryland's auto insurance requirements include a minimum of:
- $30,000 for bodily injury per person
- $60,000 for bodily injury per accident
- $15,000 for property damage
For vehicles that your business uses but does not own, you'll need a separate policy called hired and non-owned auto (HNOA) insurance. This policy provides liability coverage but it does not cover damage to the insured vehicle.
Personal auto insurance will typically not cover any driving for business purposes, which is why you may need supplemental coverage.
Surety bonds
A surety bond guarantees financial reimbursement for the client if a carpenter fails to fulfill the terms of a contract or adhere to regulations. There are many different types of surety bonds, including bid bonds, performance bonds, and payment bonds.
The MHIC requires carpenters who work on home improvement projects to have $30,000 in personal net worth or a surety bond. Public works projects, state contracts, municipal permits, and contracts with private clients may also necessitate a bond.
For example, city ordinances might require a bond for carpentry work that impacts public property, or a carpenter might need a bond to bid on a construction project. Being bonded and insured, even when it's not required, can elevate your business above the competition and help you win contracts.
Do I need a license to be a carpenter in Maryland?
Yes, carpenters who work on home improvement projects need a contractor's license from the Maryland Home Improvement Commission.
As part of the licensing requirements, carpenters must carry general liability insurance. They also need to pass an exam, have two years of experience or education, provide proof of financial solvency or a bond, and pay an application fee.
General contractors and commercial builders are not licensed on the state level. However, they may need to apply for a license or permit in their county or city, depending on local regulations.
How much does carpenter insurance cost in Maryland?
Carpenters based in Maryland who buy policies from Insureon pay an average of:
General liability: $106 per month
Business owner's policy: $85 per month
Workers' compensation: $201 per month
The cost of carpenter insurance depends on several factors, including the type of carpentry you do. Businesses that take on higher-risk projects or employ multiple workers typically pay more for coverage.
What factors affect business insurance costs for carpenters in Maryland?
Here are some of the top factors that determine insurance premiums for Maryland carpenters during the underwriting process:
- Types of projects: Contractors who take on high-risk projects, such as framers and roofers, will pay more for insurance than low-risk contractors, such as cabinet makers and finish carpenters.
- Business size: Each employee or subcontractor increases the risk of an accident or potential damage to client property, which raises your insurance rates.
- Annual revenue and payroll: Carpentry businesses that have higher revenue and payroll are associated with more frequent liability claims, so they typically pay more for insurance.
- Business equipment and property: Higher-value items, such as table saws and other power tools, cost more to insure than hand tools and other inexpensive items.
- Years of experience: Carpenters with more experience tend to pay lower premiums than newer businesses, as over time they can establish themselves as low risk.
- Location: Businesses in Baltimore and other urban areas will cost more to insure than businesses in rural Maryland. Crime rates, property values, foot traffic, and other regional factors affect your premiums.
- Policy limits and deductibles: Higher coverage limits and lower deductibles typically raise your premiums, while lower limits and a higher deductible can help keep your insurance rates low.
- Claims history: A carpenter who has filed an insurance claim in the past will likely pay more for insurance than a contractor with a clean history of claims.
In addition, the types of insurance you purchase will determine how much you pay for coverage. Carpenters working on new construction may need builder's risk insurance to cover a structure in progress and building materials. Other projects may benefit from installation floater insurance to cover materials and other movable property awaiting installation.
How to save money on carpentry insurance in MD
Maryland carpenters can often lower their insurance costs without sacrificing coverage. Consider these strategies when shopping for insurance:
Bundle policies. A business owner's policy combines general liability and commercial property coverage in a single package. Purchasing this package is often more affordable than buying the policies separately.
Choose the right payment option. Some insurance companies offer savings when you pay your premium annually rather than in monthly installments. Paying upfront can also help you avoid installment fees.
Insureon offers flexible options, including monthly and annual plans, so you can select the payment schedule that works best for your budget and cash flow. Our knowledgeable agents can work with you to find a plan that matches your risks and needs.
Improve workplace safety. Businesses with strong risk management and safety programs often experience fewer claims, which helps keep insurance costs down.
Employee safety training, protective equipment, regular tool inspections, and fall-protection measures can help reduce workplace injuries and workers' compensation expenses.
Avoid short-term coverage when possible. Some contractors purchase insurance only when it's required for a specific project. However, maintaining continuous coverage throughout the year provides consistent protection and can be less expensive than repeatedly starting and canceling policies.
A lapse in coverage can make it more difficult to secure policies later, and can also increase premiums. Keeping coverage in force may help you qualify for lower rates over time.
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How do I get Maryland carpenter insurance?
Insureon helps you save time and money shopping for carpenter liability insurance by comparing quotes from top U.S. insurance companies.
Our insurance agents are licensed in Maryland and can answer your questions as you consider coverage. They can also help you find specialized business insurance, such as equipment breakdown coverage.
To make the application go quicker, have this information ready:
- Workforce details, such as the number of employees and subcontractors
- Current and projected revenue
- Business partnerships
- Desired coverage limits
- Claims history
- Commercial lease requirements
Apply for free insurance quotes today to find affordable contractor's insurance that fits your business needs. Most small business owners receive a certificate of insurance (COI) for proof of coverage the same day.
The average costs on this page were derived from our data on Maryland small business owners in the carpentry field who purchased policies through Insureon. Most of our customers have less than five employees, annual revenue ranging from around $50,000 to more than $200,000, and five years or less in business.