Cabinet Installer Insurance

While there is no specific license for installing cabinets, your state's laws will determine other licenses and permits you may need. That includes:

• You may need a carpentry license. Most states require a carpenter's license or a general contractor's license for larger home renovation projects. For example, contractors in California must get licensed to take on projects worth $1,000 or more in materials and labor.
• You may need a license for other types of work. In many states, you'll need an electrician's license for any electrical project, such as installing under cabinet lighting. Plumbers and HVAC technicians often need a license as well.
• You may need a business license. Even if your state doesn't require a business license, you likely need one to comply with the laws in your county or city.
• You may need a sales tax permit. Any business that sells tangible goods needs to obtain a sales tax permit from the state tax department.

Trade license requirements are different in each state. They usually include a certain amount of education or experience, an exam, an application fee, and appropriate business insurance and bonds.

If you have employees, then state laws typically require you to carry workers' compensation insurance. Most states require you to buy coverage as soon as you hire your first employee.

Workers' comp covers medical treatment and disability benefits if an employee is injured on the job or develops an occupational disease. It usually includes employer's liability insurance, which pays for legal defense costs if an employee blames your business's lack of safety for their injury.

Because personal health insurance won't cover work-related injuries, sole proprietors and independent contractors may decide to invest in this coverage for protection against costly medical bills.

If a contractor drops a cabinet on their foot, or develops a back injury after years of lifting heavy cabinets, workers' compensation would pay for their doctor's visit, medications, and physical therapy. They'd also receive a portion of their wages while they're recovering and unable to work.

Installation contractors often depend on the following insurance products, in addition to those mentioned above:

• Professional liability insurance: This policy provides financial protection against accusations of professional negligence, such as incorrect materials or undelivered cabinets. It's also called errors and omissions insurance (E&O).
• Builder's risk insurance: Also called course of construction insurance, this insurance covers damage to structures under construction and materials at a building site.
• Business interruption insurance: If your cabinet business is forced to close temporarily due to a fire or other covered property insurance claim, this policy will cover your day-to-day operating costs and lost profits.
• Surety bonds: A surety bond provides financial reimbursement for clients if your business fails to meet the terms of a contract. Some states require a bond as part of their contractor's licensing requirements.
• Commercial umbrella insurance: Umbrella insurance boosts the coverage of other policies once they reach their limit on a liability claim, such as general liability insurance, commercial auto insurance, and employer's liability insurance.
• Installation floater insurance: If your cabinets or other products are stolen or damaged at a jobsite, this property coverage will help pay for your losses. It covers materials in transit and stored off-site, which is important since commercial property insurance only covers items at a fixed business address.
• Equipment breakdown insurance: This policy covers repair or replacement of carpentry and wood manufacturing machinery that suffers a sudden breakdown.
• Products-completed operations insurance: Also called product liability insurance, this coverage pays for harm caused by a product or your completed work, such as a tip-over injury. It's usually included in general liability insurance.