Woodworking Insurance

Several factors affect insurance premiums for woodworking contractors during the underwriting process, such as:

• Type of services: Insurers will look at the services you offer, such as wood manufacturing or door and window installation.
• Business property: Expect to pay more to insure a large office or industrial table saws than less expensive supplies.
• Annual revenue: Higher revenue often brings greater exposure to liability claims and larger potential losses, which increases your insurance rates.
• Business location: Insurance costs can vary based on property values, litigation trends, crime rates, and the cost of doing business in your region.
• Coverage limits and deductibles: Higher policy limits generally increase premiums, while choosing a higher deductible can lower them.
• Claims history: Contractors with previous insurance claims may pay higher rates than those with a clean history of claims.
• Number of employees: A larger workforce increases the cost of workers' comp and other policies, as each employee brings the risk of an injury or accident.

The type of work you do, your clients, and the laws in your state will determine whether you need a license or permit for your woodworking business. Here are a few examples:

• Business license. Typically, every business owner must secure a business license from their state, county, or city, with the specifics varying by region.
• Contractor's license. In some states, you need a contractor's license to do certain types of woodworking, such as carpentry or house framing, or to take on projects above a certain monetary threshold. To get licensed, you may need to have a certain amount of experience or pass an exam.
• Building permit. Local regulations determine when you need a building permit for a project, such as a deck, shed, or fence. New construction and home renovation often require a permit.

For larger projects, general contractors or project owners may require you to have credentials, such as QCP project certification. Even when a license or certification isn't required, they can help raise your business above the competition when trying to win a contract.

Product liability insurance isn’t often required for woodworkers, but it provides important financial protection for your business. Additionally, you may need general liability insurance—which includes product liability coverage—to rent a space, sign a contract, or get a license.

Any time you sell a physical product, there’s a risk it could cause harm. For example, a bookshelf could tip over and injure a child, or a defective chair could break when a customer sits on it, causing a concussion. If a customer claims your product caused a bodily injury or property damage, you could face a costly lawsuit.

Product liability insurance can help pay for legal fees, settlements, medical bills, and property repairs if your product harmed a customer or damaged someone's property. It includes coverage for your completed operations, such as a cabinet that falls from the wall and breaks a countertop long after the project was complete.

Manufacturers, retailers, and distributors should protect themselves with product liability coverage, as every business in the supply chain can face a product lawsuit, even if they weren't at fault.

Yes, you can buy insurance that provides financial protection against theft, vandalism, fires, storms, and other business property losses, helping you avoid out-of-pocket expenses.

Here are the most common types of insurance for these kinds of claims:

• Commercial property insurance covers financial losses in the event of a burglary, fire, or windstorm at your woodworking shop. This policy only covers items at your primary business location.
• Inland marine insurance, also called tools and equipment insurance, covers a woodworker's saws, hammers, ladders, and finished products in transit and at jobsites and other off-site locations.
• Equipment breakdown insurance pays for repair or replacement if a table saw or other crucial piece of woodworking equipment breaks down unexpectedly.
• Commercial crime insurance protects against losses caused by dishonest employees, such as cash register theft or stolen property.

Property claims cause your premium to go up, which is another reason it's best to prevent theft in the first place. Sometimes insurers offer a discount on your premium when you install an approved security system or take other preventative measures.

Small business owners in the woodworking industry often add these types of construction insurance as part of a comprehensive risk management strategy:

• Business personal property (BPP) coverage protects your woodworking equipment and inventory and can be added to your general liability policy if you don't have a dedicated workshop.
• Installation floater insurance helps pay for financial losses if materials awaiting installation are damaged or stolen at a jobsite. It's a type of inland marine insurance.
• Business interruption insurance, also called business income insurance, reimburses you for lost income and day-to-day expenses if your business is forced to close temporarily due to a fire or other covered property claim.

Woodworkers can save money on insurance by comparing quotes from different providers. With Insureon, you can get free quotes from top-rated insurance companies by filling out our easy online application.

Other ways to save money include:

• Bundle policies. Contractors can often buy general liability coverage and commercial property insurance together in a business owner's policy, which costs less than buying these policies separately.
• Customize your coverage. Choose lower limits or a higher deductible to reduce your premium, but make sure your policy can still cover a potential claim and that you can afford to pay the deductible in a crisis.
• Avoid accidents and claims. You can prevent employee injuries and client accidents that lead to claims by enforcing safety protocols, eliminating clutter, and providing personal protective equipment (PPE). Clear communication and accurate project cost estimates can help you avoid client lawsuits related to your performance.

Insureon's licensed agents can help you find the right insurance solutions for your business needs, whether you work on large-scale construction projects or build furniture for homes. Our flexible payment plans let you pay monthly or annually to fit your business's budget.