Your carpenter business is involved with a wide range of residential and commercial jobs, from building custom cabinets or bookshelves in a client’s home, to working with construction companies, builders, remodelers, and housing developers. It is important to protect your business, clients, and employees by obtaining business insurance. You have a diverse set of risks, including employee injury, damage to a client’s home or business, and various types of crimes. Carpenter business insurance helps to protect your company against these types of risks and other unforeseen circumstances.
Types of Carpenter Business Insurance
The following types of insurance policies are essential for a carpenter business:
General liability insurance is a business policy that includes basic coverage for services you provide, products you sell, and injuries occurring on your premises. If a customer visiting your shop and slips on sawdust on the floor, his or her injuries are covered by premises liability under the general liability policy. Any woodworking products you sell or completed services you provide are covered under products liability and completed operations, respectively.
All vehicles you use in your carpenter business should be covered by a commercial auto insurance policy. Business auto can cover vehicles used for errands like making a bank deposit, or for vehicles used in daily operations, such as vans or pickup trucks. The policy protects damage to the vehicles, bodily injury, theft and vandalism.
Business Owner’s Property (BOP)
If you desire to simplify your insurance coverage, you can get a package policy called a BOP, or business owner’s policy. This allows you to customize the policy with your chosen coverages, like building and contents, equipment breakdown, business income, electronic data, and constructed buildings. If you have equipment that breaks down, it may be covered under equipment breakdown and business income for any work you have to postpone.
Business property insurance is a policy that is needed for your office, warehouse and workshop. If there is any type of disaster or event that causes damage to your property, the policy helps to make repairs to the structure and replace any tools or equipment that was destroyed. With a carpenter business, the risk of fire is huge. If a fire occurs in your building, it could destroy all of your lumber and any woodworking projects you had finished. This is why it is so important to have a business property insurance policy.
If you are creating a woodworking project in your shop and need to transport it or ship it to your customer, this could put it at risk of damage. Inland marine insurance protects any goods or equipment that are moving or being transported from one location to another. So if a custom bookshelf, desk, or hutch are destroyed while in motion, you are afforded protection.
Business Interruption Insurance
You can’t control unexpected events like snowstorms or natural disasters, but with business interruption insurance, your business does not have to suffer as a result. This insurance policy helps if you have to stop work while a storm passes or due to these types of disasters. Since you often work outdoors, this can happen often, making it even more important to have a business interruption insurance policy.
Equipment Breakdown Insurance
Equipment breakdown insurance coverage is there to protect you if any carpentry equipment stops working and it needs to be repaired or replacement. Power tools like electric sanders, routers, saws and mortisers are not cheap, but are essential for your carpenter business. If one or more stops working, this carpenter business insurance policy helps you to replace them or have them repaired.
Cyber Liability Insurance
If you run a website that advertises your services and shows clients the type of work you can do, it is at risk from cyber crimes. Cyber crimes include data breaches, spyware, and viruses that can infect your computer, destroy your website, and even steal private information from anyone visiting the website. With cyber liability insurance, you have legal and financial protection from such crimes.
Employee Dishonesty Coverage
Employee dishonesty coverage is needed to protect your company from any crimes your employees might commit. This may include embezzling money by your accountant, stealing tools or equipment by carpenters or labor workers, or vandalizing property after hours. Any loss you experience will be covered by the employee dishonesty policy.
Contract Surety Bonds
A contract surety bond protects your carpenter business and your clients by ensuring you both abide by terms in your work contract. There are four main types of surety bonds, including a payment bonds, bid bond, performance bond, and maintenance bond. With these surety bonds, you are promising to complete the work as requested, and your client promises to pay upon receipt of the invoice.
One of your greatest risks is the risk of injury to your employees. Carpentry is a hands-on profession, putting employees at risk for injury from the tools they use. Whether they cut their hand on an electric saw or fall off a ladder when installing a built-in unit in a client’s home, their injuries and recovery costs are covered by workers’ compensation insurance. It is also required by law in many states.
While it may seem like a carpenter business has few risk of crimes, this is still something you should have insurance for. Crimes can be from dishonest employees, theft of your tools or equipment, or vandalizing your property. With crime insurance, damage or loss is covered by the policy.
Keep in mind that your carpenter business is plagued not only by common risks, but by those that are less common too. This will help you to focus on obtaining the best range of carpenter business insurance coverage.