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:
- What Is Cabinet Manufacturers Insurance?
- How Much Does Cabinet Manufacturers Insurance Cost?
- Why Do Cabinet Manufacturers Need Insurance?
- What Type Of Insurance Do Cabinet Manufacturers Need?
- What Does Cabinet Manufacturers Insurance Cover & Pay For?
What Is Cabinet Manufacturers Insurance?
Cabinet manufacturers insurance is a type of insurance coverage specifically designed for businesses that manufacture and sell cabinets.
This insurance provides protection for the manufacturer against financial losses and damages that may arise from accidents, product defects, or other unexpected events during the manufacturing process or in the sales of the cabinets. The insurance policy can cover the cost of repairing or replacing damaged products, loss of income, and legal fees in the event of a lawsuit.
Cabinet manufacturers insurance is an essential coverage for businesses in this industry as it protects them from potential financial losses and helps to ensure the stability and longevity of the business.
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.
What Does Cabinet Manufacturers Insurance Cover & Pay For?
Cabinet manufacturers can face a variety of legal issues, leading to potential lawsuits. Here are some examples of situations in which cabinet manufacturers might be sued, and how insurance could potentially provide protection:
Product Liability: If a cabinet manufactured by a company causes harm or injury due to faulty design, manufacturing defects, or insufficient instructions/warnings, the manufacturer can be sued.
Insurance Solution: Product Liability Insurance can help in such situations. It can cover the legal costs and any court-ordered compensation or settlement negotiated, up to the policy limit.
Property Damage: If during the installation process, the manufacturer's team accidentally damages a customer's property, they could be held liable.
Insurance Solution: General Liability Insurance often covers such claims. It can pay for the cost of repairs or replacement, as well as any legal fees if the client sues for damages.
Workers' Injuries: If an employee gets injured while working - for instance, during the manufacturing process or while installing cabinets at a client's property - they might sue the company for their medical bills and lost wages.
Insurance Solution: Workers' Compensation Insurance is designed to cover such costs. In most states, businesses are required to carry workers' comp insurance to provide for their employees' medical expenses and a portion of lost wages in the event of a workplace injury. This insurance also typically includes an 'employer's liability' component, which can cover legal costs if the employee sues.
Breach of Contract: If the cabinet manufacturer fails to deliver on a contract, for instance, not meeting the agreed-upon deadline or quality standards, they could be sued by the client for breach of contract.
Insurance Solution: Professional Liability Insurance (also known as Errors and Omissions Insurance) can help cover legal defense costs and any damages awarded up to the policy limits.
Intellectual Property Infringement: If a cabinet design infringes on another company's patent or copyright, the manufacturer could face a lawsuit.
Insurance Solution: Intellectual Property Insurance can help cover the costs of defending against claims of IP infringement, including legal fees and any damages awarded by a court, up to the policy limit.
It's important to note that the specifics of what is covered can vary significantly between different insurance providers and policies, so it's crucial for businesses to thoroughly review any insurance contracts and discuss their specific needs with a knowledgeable insurance broker or agent.
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 Workers Compensation Code(s): 2802 Carpentry - Shop Only & Drivers, 2883 Furniture Manufacturing and Cabinet Shop - Wood - NOC
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.
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.
- 3D Printing
- Audio & Video Equipment
- Auto Parts
- Bottling Plants
- 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
- Dairies & Creameries
- Down And Feather Products
- Dry Ice
- Dyes & Pigments
- Electronic Toys & Games
- Exercise Equipment
- Farm Equipment
- Feed & Grain
- Flavoring Extracts
- Frozen Foods
- Fruit Juice
- Fur Garment
- Garage Door
- Gypsum Products
- Ice Cream
- Industrial Equipment
- Iron & Steel Foundries
- Lawn Mowers
- Leather Apparel
- Leather Goods
- 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
- Psychedelic Drugs
- 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
- Vegetable Juice
- Vending Machines
- Wire Rope
- Wood Furniture
- Writing Instruments
- Specialty Manufacturing
- Specialty Product Liability
The manufacturing industry is a vital part of the economy and plays a significant role in the production of goods and services. However, it is also an industry that is prone to risks and accidents, which can result in costly damages and lawsuits. Therefore, it is essential for businesses in the manufacturing industry to have insurance to protect them against potential losses.
Business insurance can cover a wide range of risks, including property damage, liability, and worker injuries. For instance, if a fire were to break out in a manufacturing facility and destroy equipment or inventory, commercial insurance could cover the costs of replacing or repairing the damages. Similarly, if a worker were to be injured on the job, business insurance could cover medical expenses and lost wages.
In addition to protecting against physical damages, insurance can also provide financial protection against legal liabilities. If a customer were to sue a manufacturing business for a faulty product, the commercial insurance could cover the costs of legal fees and settlements.
Overall, insurance is essential for the manufacturing industry as it helps to mitigate risks and protect against unexpected costs. Without it, businesses in the industry could face financial ruin in the event of an accident or lawsuit.
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.