Cabinet Manufacturers Insurance Policy Information
Cabinet Manufacturers Insurance. Any piece of furniture that consists primarily of a frame - typically rectangular or square in shape - with added doors or drawers, and frequently also shelves, can be considered a cabinet.
Wood cabinet manufacturers produce a variety of cabinets including audio or video cabinets, bathroom or kitchen cabinets, and counter-style cabinets for commercial use. Materials used include solid wood, veneered plywood, or particle board, and include fasteners made of metal or plastic. The finished product may be pre-assembled, or assembled during installation by the customer or contractor.
Normally, the manufacturer receives wood products in specific lengths and widths. They are seasoned (dried either in kilns or in the yard), cut, planed, sanded, assembled with glue or hardware, stained, varnished, painted, or otherwise finished. Modern production work will usually employ CNC workstations (computerized machining), but custom work may be done more by hand.
Custom manufacturers may also install their product. Some cabinet makers may also own a retail outlet. Component parts may be manufactured in different locations or different countries.
Cabinets may be wall-mounted, built into a space, or free-standing. Kitchen and bathroom cabinets are perhaps the most well-known examples, but cabinet makers know that these versatile storage spaces come in many other forms, too.
Traditionally, most cabinets were produced with hardwood. Today, softwood and wood alternatives like laminate, thermofoil, MDF, plywood, and even steel are also popular materials in the manufacture of cabinets.
Cabinet makers may essentially be woodworkers, in which case they are likely to use modern machinery that can include CNC machines, as well as tools such as saws and drill presses. To make steel cabinets, welding is required.
Some cabinet manufacturers will run large-scale industrial operations, while others are small businesses who employ very few workers. Regardless of which category a company that makes cabinets falls into, numerous perils have the potential to threaten the business.
That is why the right cabinet manufacturers insurance coverage is so important - so, what types of insurance would cabinet-making ventures need, and how do you know that your business is adequately insured? Read on to find out more.
Cabinet manufacturers insurance protects your manufacturing business from lawsuits with rates as low as $57/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked cabinet manufacturing insurance questions:
- How Much Does Cabinet Manufacturers Insurance Cost?
- Why Do Cabinet Manufacturers Need Insurance?
- What Type Of Insurance Do Cabinet Manufacturers Need?
How Much Does Cabinet Manufacturers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small cabinet manufacturing businesses ranges from $57 to $79 per month based on location, size, revenue, claims history and more.
Why Do Cabinet Manufacturers Need Insurance?
Cabinet makers need insurance - just like virtually any other commercial venture, large or small - because unforeseen circumstances that could seriously threaten your success can always be just around the corner.
As a cabinet manufacturer, you will share some of those risks with companies in other field, but you will also have more industry-specific factors to consider.
An act of nature, such as a lightning strike that could then start a fire, could ruin your workshop or manufacturing facility overnight. Criminal acts like vandalism or theft could lead to the loss of a significant portion of your assets.
It is also possible for an employee to sustain a workplace injury, even if your company prioritizes health and safety. Should a manufacturing error cause one of your cabinets to malfunction, in turn injuring an end customer, you could even be facing a lawsuit - and the same holds true for a situation in which an employee accidentally causes damage to third party property.
Without cabinet manufacturers insurance, your company alone would be responsible for the costs these and other threats translate into. With the proper coverage, however, these events can become nothing but temporary setbacks.
That is why it is so important to make sure that all your business insurance needs are met.
What Type Of Insurance Do Cabinet Manufacturers Need?
Your cabinet manufacturers insurance plan needs to be tailored to fit your exact needs. The location of your facility or facilities, the materials you use in your manufacturing process, how many employees work for you, and how and how far you transport your cabinets to their buyers will all influence your insurance needs.
A commercial insurance agent, ideally one with a deep understanding of your field, is your best partner in determining the right coverage for your business. However, essential types of insurance for cabinet makers include:
- Commercial General Liability: Many would say this type of insurance should be your first priority, as it serves to cover the costs that follow should a third party claim that your company caused bodily injury or property damage. It can cover medical or repair expenses as well as legal fees.
- Product Liability: This type of cabinet manufacturers insurance specifically covers claims of injury or property damage as a result of your products due to, for example, a manufacturing error or an error with assembly instructions. It covers the same kind of scenarios as general liability insurance, after your product has left your care.
- Commercial Property: This kind of insurance is designed to protect your physical assets from financial loss in the event of acts of nature, theft, vandalism, and similar accidental circumstances. It can protect your building, your equipment and tools, and your inventory. Commercial property insurance also offers compensation for lost revenue as a result of these events.
- Workers' Compensation: Any business, with the occasional exception of extremely small companies, needs workers' comp for three reasons. The first two are to comply with local regulations and to protect yourself from civil suits filed by workers. The third is that accidents can always unfold over the course of cabinet making; whether an employee cuts themselves while working, or breathes in fine wood dust and faces respiratory symptoms, you can be held liable. This type of insurance covers an employee's medical bills and lost wages in these circumstances.
These are examples of the kinds of insurance cabinet makers will need to carry. Ask your commercial insurance broker which plan will best suit you, and whether you need any additional types of cabinet manufacturers insurance.
Cabinet Manufacturing's Risks & Exposures
Premises liability exposure is normally low as access by visitors is limited. If the manufacturer conducts tours or has a showroom or retail outlet, visitors may be injured by slips, trips, falls, or flying debris. Storage of wood in the open presents an attractive nuisance hazard.
The yard should be fenced to prevent unauthorized access, with proper lighting and warnings. Dust, fire or explosion, fumes, and noise may affect neighboring properties. If the manufacturer performs retail delivery or installation, there may be frequent small property damage claims.
Products liability exposure normally arises out of the installation rather than the actual product. Instructions for installation must be exact, especially regarding weight limits. Most other hazards are workmanship or nuisance hazards, such as wood splinters, protruding nails or poorly cut openings.
Environmental impairment exposure is moderate to high due to possible contamination of ground, air, and water from sawdust, chemicals, paints, and varnishes used in processing and the lubricants and solvents used to service machinery. Storage and disposal procedures must adhere to all EPA and other regulatory standards.
Workers compensation exposure may be extensive. Injuries from production machinery are common, as are burns, cuts, slips, trips, falls, foreign objects in the eye due to flying wood chips and dust, hearing impairment from noise, back injuries from lifting, and repetitive motion injuries.
There should be safety training and protective equipment. Workstations should be ergonomically designed. The high volume required for production schedules may lead workers to remove guards on the machinery, or to postpone maintenance and repair to increase production.
Exposure to chemicals, dust, glues, binding agents, paints, and varnishes can result in burns and skin, eye and lung irritation. Workers should be aware of the toxic nature of any chemical and should be made fully aware of the need to watch for early signs and symptoms of problems. Drivers of forklifts and vehicles may be injured in accidents.
Property exposures consist of an office, shop, warehouse for finished goods, and often a yard for the raw materials. Ignition sources include electrical wiring, heating and cooling equipment, overheating of production machinery, and explosions from the build-up of dust from the cutting and sanding operations.
The risk increases dramatically in the absence of proper dust collection systems, ventilation, and adequate disposal procedures. Wood is highly combustible and susceptible to damage by fire, smoke, and water. Glues, paints, varnishes, and stains may be flammable and must be adequately separated and stored from other operations.
Spray-painting operations should be done in a spray booth with explosion-proof electrical components. The use of dip tanks instead of spray booths may require special attention.
Exotic woods or expensive hardwood products may be attractive to thieves. Appropriate security controls should be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.
Business income and extra expense exposures can be high as a lengthy amount of time is required to restore operations.
Equipment breakdown exposures include malfunctioning production equipment, ventilation and dust collection systems, electrical control panels and other apparatus. A lengthy breakdown to production machinery could result in severe loss, both direct and under time element.
Crime exposure comes from employee dishonesty and theft if raw wood is expensive or finished items are high in demand. Employees may act alone or in collusion with outsiders in stealing money, raw materials, or finished stock. Background checks should be conducted on all employees.
There must be a separation of duties between persons handling deposits and disbursements and handling bank statements. The manufacturer should have security methods in place to prevent theft.
Inland marine exposures include accounts receivable if the manufacturer offers credit, computers (which may include computer-run production equipment, contractors' equipment for forklifts and other heavy machinery, exhibitions, goods in transit and valuable papers and records for customers' and suppliers' information.
The major perils are fire, water damage, theft, collision, and upset. If the manufacturer installs products, an installation floater should be considered.
Business auto exposure may be high if the manufacturer transports raw lumber or finished goods. Proper loading and tie-down procedures are essential to prevent overturn and /or release of lumber. Retail delivery to homes represents a serious exposure due to the street presence of children and possible time pressures on the drivers.
Manufacturers generally have private passenger fleets used by sales representatives. There should be written procedures regarding the private use of these vehicles by others. Drivers should have an appropriate license and an acceptable MVR. All vehicles must be well maintained with documentation kept in a central location.
Commercial Insurance And Business Industry Classification
- SIC CODE: 2434 Wood Kitchen Cabinets, 2517 Wood Television, Radio, Phonograph, And Sewing Machine Cabinets
- NAICS CODE: 337110 Wood Kitchen Cabinet and Countertop Manufacturing, 321999 All Other Miscellaneous Wood Product Manufacturing
- Suggested ISO General Liability Code(s): 53731, 53732, 53733
- Suggested Workers Compensation Code(s): 2802, 2883
Description for 2434: Wood Kitchen Cabinets
Division D: Manufacturing | Major Group 24: Lumber And Wood Products, Except Furniture | Industry Group 243: Millwork, Veneer, Plywood, And Structural Wood
2434 Wood Kitchen Cabinets: Establishments primarily engaged in manufacturing wood kitchen cabinets and wood bathroom vanities, generally for permanent installation. Establishments primarily engaged in manufacturing free-standing cabinets and vanities are classified in Major Group 25. Establishments primarily engaged in building custom cabinets for individuals are classified in Retail Trade, Industry 5712.
- Cabinets, wood: to be installed
- Kitchen cabinets, wood: to be installed
- Vanities, bathroom, wood: to be installed
Description for 2517: Wood Television, Radio, Phonograph, And Sewing Machine Cabinets
Division D: Manufacturing | Major Group 25: Furniture And Fixtures | Industry Group 251: Household Furniture
2517 Wood Television, Radio, Phonograph, And Sewing Machine Cabinets: Establishments primarily engaged in manufacturing wood cabinets for radios, television sets, phonographs, and sewing machines.
- Audio cabinets, wood
- Cabinets, wood: radio, television, phonograph, and sewing machines
- Phonograph cabinets and cases, wood
- Radio cabinets and cases, wood
- Sewing machine cabinets and cases, wood
- Stereo cabinets, wood
- Television cabinets, wood
Cabinet Manufacturers Insurance - The Bottom Line
Cabinet manufacturers insurance policies can be different in coverages, costs and exclusions. To find out if your cabinet manufacturing operation has the right insurance policies - talk to an experienced business insurance agent.
Often they are able to save you on premiums and offer you better policy options than you currently have.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
Additional Resources For Manufacturing Insurance
Learn all about manufacturing insurance. Manufacturers face many unique risks such as product libility and/or product recall exposures due to the nature of their business operations.
- Audio & Video Equipment
- Auto Parts
- Brooms & Brushes
- Camping Equipment
- Canned Fruit & Vegetables
- Canvas Products
- CBD Oil And Hemp
- Clock & Watch
- Commercial Air Conditioning
- Commercial Electronics
- Communications Equipment
- Construction Equipment
- Cork Products
- Down And Feather Products
- Dry Ice
- Dyes & Pigments
- Electronic Toys & Games
- Exercise Equipment
- Farm Equipment
- Feed & Grain
- Fur Garment
- Garage Door
- Gypsum Products
- Iron & Steel Foundries
- Lawn Mowers
- Leather Apparel
- Lighting & Wiring
- Lumber & Wood Products
- Machine Shop
- Major Electrical Appliances
- Marijuana Products
- Mattresses & Box Springs
- Metal & Plastic Furniture
- Metal Heat Treating
- Metal Toys
- Musical Instruments
- Nonferrous Foundries
- Ornamental Metalwork
- Paper & Allied Products
- Pet Food
- Plastic & Rubber Toys
- Plastic Goods
- Plastics Molding, Forming & Extruding
- Product Liability
- Pulp & Paper Mills
- Residential Air Conditioning & Heating
- Rubber Goods
- Sawmills & Planing Mills
- Screw Machine Products
- Sheet Metal
- Soap & Detergent
- Small Electrical Appliances
- Sporting Goods
- Stone Products
- Textiles Finishing & Coating
- Tool & Die Shops
- Vending Machines
- Wire Rope
- Wood Furniture
- Writing Instruments
For manufacturers, having the proper coverage is very important. You will need Products/Completed Operations Liability Coverage to protect you against injuries or property damage cause my the products you make or sell.
Manufacturing is an extremely broad category that includes countless potential hazards and exposures in virtually all coverage areas. Because of this, every individual manufacturer is unique and a specific risk survey of every operation is advisable.
The basic insurance needs for every class of business or operation includes property coverage for buildings, machinery and equipment, as well as for raw stock and finished products.
Liability insurance for premises exposures is important but products liability insurance presents greater concerns so these exposures and coverage needs must be evaluated carefully.
In addition, protection for injuries to workers, environmental coverages and automobile insurance are priority items.
What does the insured does that could result in a covered loss? The insuring agreement only requires that the insured be legally obligated to pay damages for injury to others or damage to their property included within the products-completed operations hazard covered by the insurance.
Because of this, every product manufactured and completed operation exposure for each named insured must be determined, described and evaluated to be certain that each represents acceptable exposures, or are acceptable classes of business to the insurance company providing coverage.
Once the extent of all business activities and operations is determined, the process of identifying hazards begins. The first step in the process is completely listing and describing all current products being manufactured and projects being worked on.
The next step is obtaining the same information for discontinued products and completed projects for the past five to 10 years, depending on the products or projects involved. This should include an explanation of why the products were discontinued. If some completed projects were of a different type than those currently being worked on, an explanation is in order, including whether the insured may resume them in the future.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Employee Dishonesty, Accounts Receivable, Computers, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits Liability, Environmental Impairment Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.