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Lumber And Wood Products Manufacturers Insurance Policy Information

Lumber And Wood Products Manufacturers Insurance

Lumber And Wood Products Manufacturers Insurance. Wood and lumber products - also sometimes called forest products - comprise a wide variety of commodities.

Lumber and wood products manufacturers convert logs into dimension lumber, wood veneers, pressboard, and particleboard. Logs are received from suppliers. After the bark is stripped, the log is wetted down and the cutting begins.

Logs intended for dimension lumber are rough-cut into boards of varying widths and lengths. Some boards are squared on an edger and given a smooth finish on a planer. Veneer is cut paper thin, and may be sold in rolls or glued and pressed into plywood.

The wood may be treated and then seasoned (dried in a kiln or in the open yard), or dried and then treated, depending on the end use. The dried wood may be stained, cut, planed, sanded, glued, nailed, painted, or varnished.

Dimensional lumber, for instance, is lumber cut to specific dimensions, planed, and smoothed, by planing mills.

Wood veneers are thin sheets of wood that are primarily used in the manufacture of furniture, while pressboard and particle board are made with byproducts of the lumber industry.

Companies that manufacture wood and lumber products of various types play a vital role in the supply chain, as their products are used in industries as diverse as construction, furniture-making, and even the manufacture of cellulose-based products such as heavy-duty file folders.

Work in this industry relies on valuable industrial equipment - and people employed in the manufacture of wood and lumber products have an above-average risk of occupational injuries caused by, among other hazards, exposure to vibrations and fungicides.

That is just one reason why it is so important for companies that manufacture wood and lumber products to carry business insurance.

What types of lumber and wood products manufacturers insurance coverage may you require if you operate in this industry? To find out more, keep reading.

Lumber and wood products 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 lumber and wood products manufacturing insurance questions:

What Is Lumber And Wood Products Manufacturers Insurance?

Lumber and wood products manufacturers insurance is a type of insurance coverage designed specifically for companies in the lumber and wood products industry. It provides protection against the various risks that these companies face, such as property damage, liability, and loss of income.

This insurance covers everything from sawmills and lumber yards to furniture makers and cabinet shops. It is designed to protect the company's assets, including the buildings, equipment, and inventory, as well as cover the cost of any lawsuits that may arise from the products they produce.

How Much Does Lumber And Wood Products Manufacturers Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small lumber and wood products manufacturing businesses ranges from $57 to $79 per month based on location, size, revenue, claims history and more.

Why Do Lumber And Wood Products Manufacturers Need Insurance?

Insurance For Manufacturers

Companies that manufacture wood and lumber products of diverse kinds need to be insured because they are vulnerable to a variety of perils that could have catastrophic - and even bankrupting - consequences.

Some of the risks that companies within lumber and wood manufacturing industry face are common to all business, while others are specific to your own field. Without the correct insurance, all can have a similarly damaging financial impact.

Theft, vandalism (which can include the intentional setting of a fire), and acts of nature like landslides, serious floods, lightning strikes, hurricanes, and wildfires are all examples of major threats that can strike nearly any business.

In one fell swoop, they can undo the hard work you put into building your company and halt production for the foreseeable future.

When an employee becomes injured on the job, a third party suffers an accident while on your premises, or your company inadvertently causes damage to a residential or business property, this, too, has the potential to lead to massive losses.

In these cases, liability-related lawsuits pose a tremendous threat. The same is true if your end commodity causes injury or property damage to a third party, even once it has been incorporated into another product, due to reasons for which your company could be held responsible.

Should these or other perils befall a company manufacturing in this industry, insurance instantly ceases to be a burden and instead becomes a means to recover from loss. This is why it is vital to invest in the best lumber and wood products manufacturers insurance you can.

What Type Of Insurance Do Lumber And Wood Products Manufacturers Need?

The kinds of insurance a lumber and wood manufacturer will need to carry, as well as those they will opt to carry, vary from one company to the next. The location of your facility, the nature and value of your industrial equipment, your number of employees, and the precise types of lumber and wood products you make all help determine your needs.

For this reason, it is important to carry out an in-depth evaluation of your risk profile together with a commercial insurance agent. With that in mind, some essential types of lumber and wood products manufacturers insurance that companies in this industry are going to need include:

  • Commercial Property: Akin to homeowners' insurance but for commercial ventures, this type of insurance protects you from financial loss resulting from perils that damage your property - like theft, vandalism, and acts of nature. It generally covers your physical building, manufacturing equipment, and raw materials, as well as smaller items such as furniture and computers.
  • General Liability: This type of lumber and wood products manufacturers insurance exists to cover losses caused by third party property damage or bodily injury claims - such as lawsuits that may follow if a third party is injured on your premises, or if your lumber product damages the property of a buyer as an employee delivers it.
  • Product Liability: A more specialized form of liability insurance, this type covers the costs you may incur if a third party alleges that your product caused them harm, whether in the form of property damage or physical injury.
  • Workers Compensation: This kind of insurance serves to protect both your company and its employees. Should a worker sustain an occupational injury or illness, it pays for their medical bills and any lost wages.

Manufacturers in this industry should keep in mind that they may require more extensive lumber and wood products manufacturers insurance coverage; only a commercial insurance agent who has insights into your unique company can help you craft a tailor-made insurance plan.

Lumber And Wood Products Manufacturing's Risks & Exposures

Manufacturing LUMBER WOOD

Premises liability exposure is normally low as access by visitors is limited. If tours are given, visitors may be injured by slips, trips, falls, or flying debris. The yard storage of logs and lumber may create 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 cause damage to adjacent properties.

Products liability exposure is generally low. If the manufacturer produces pressure-treated wood or structural members such as prefabricated trusses, the exposure increases due to the potential for collapse.

Environmental impairment exposure can be significant due to possible contamination of ground, air, or water from sawdust, chemicals, paints, and varnishes generated by lumbering, sawing, and processing. In addition, the lubricants and solvents used to service machinery. Storage and disposal procedures must adhere to all EPA and other regulatory standards.

Workers compensation exposure is very high due to the heavy lifting of logs, cutting and sawing that is necessary to strip the bark and cut the wood. Injuries from production machinery are common, as are cuts, slips, trips, falls, foreign objects in the eye due to flying wood chips and dust, hearing impairment from noise, and back injuries from lifting. There should be safety training and protective equipment.

Amputations can occur from working with saws. Workers can be crushed by large logs and finished products. 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.

Because repetitive motion injuries are a concern, workstations should be ergonomically designed. Exposure to chemicals, dust, glues, binding agents, paints, and varnishes can result in burns and eye, skin, and lung irritation. Drivers of forklifts and vehicles may be injured in accidents.

Property exposure consists of an office, shop, warehouse for finished goods, and a yard for storage of raw materials. Ignition sources include electrical wiring, heating, and cooling equipment, overheating of production machinery, and explosions from the build-up of sawdust in the cutting and sanding process.

The risk increases dramatically in the absence of proper dust collection systems, ventilation, and adequate scrap disposal procedures.

Wood is highly combustible and susceptible to damage by fire, smoke, and water. Glues and paints, if any, may be flammable and must be adequately separated and stored from other operations. Spray-painting operations should be done in spray booths 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 if 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 a severe loss, both direct and under time element.

Crime exposure comes from employee dishonesty and theft if the 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.

Inland marine exposures may include accounts receivable if the manufacturer offers credit, computers (which may include computer-run production equipment), contractors' equipment, and exhibitions, goods in transit, and valuable papers and records for customers' and suppliers' information. The major perils are fire, water damage, theft, collision and overturn.

Business auto exposure is high as most lumber product manufacturers transport raw materials, finished products, or both. Large, heavy vehicles carrying logs present a high potential for loss should collision and overturn occur, or should the load spill onto a public road. Special loading and tie-down procedures are required.

Delivery of final products increases if there is a potential for long haul or time pressures on drivers. Both pickup and delivery to customers may require travel on temporary roads with uneven terrain. Manufacturers generally have private passenger fleets used by sales representatives.

There should be written procedures regarding the private use of these vehicles by others. Each driver should have an appropriate license and an acceptable MVR. All vehicles must be well maintained with documentation kept in a central location.

What Does Lumber And Wood Products Manufacturers Insurance Cover & Pay For?

Lumber And Wood Products Manufacturers Insurance Claim Form

Lumber and Wood Products Manufacturers face a multitude of risks in their operations, which could potentially lead to lawsuits. These risks range from workplace accidents to product liability issues. However, with the right types of insurance, they can protect themselves financially from the impact of these lawsuits. Here are some examples:

1. Workplace Accidents:
Lumber and wood product manufacturers operate in environments where accidents can easily occur, such as injuries from equipment, falls, or exposure to hazardous materials. An injured employee could sue the company for compensation. This is where Workers Compensation Insurance comes into play. It covers medical costs, rehabilitation expenses, and a portion of lost wages for employees who get injured or sick due to their job. In many cases, accepting workers' compensation benefits means waiving the right to sue the employer, thereby protecting the company from potential lawsuits.

2. Product Liability:
If a manufactured product is defective and causes harm to a consumer or property, the manufacturer could be sued for damages. Product Liability Insurance can help cover the legal costs and any settlements or awards resulting from the lawsuit. This type of insurance is crucial for lumber and wood product manufacturers, as defects might not be noticeable until after the product has been sold and used.

3. Environmental Damage:
Manufacturers in this industry could potentially cause environmental harm, such as water contamination from their operations. If sued for environmental damage, Environmental Liability Insurance (or Pollution Liability Insurance) can help cover the cost of legal defense, clean-up efforts, and any damages awarded. This insurance can be particularly important in industries where the risk of environmental harm is significant.

4. Property Damage:
A fire or other disaster could cause significant damage to a manufacturer's property, leading to lawsuits from neighboring businesses or individuals. Commercial Property Insurance can help pay for the cost of repairs or replacement, and may also cover legal fees if the company is sued for damage to others' property.

5. Breach of Contract:
If a lumber or wood products manufacturer fails to fulfill contractual obligations to suppliers or customers, they could be sued. Commercial General Liability Insurance often includes coverage for lawsuits related to breach of contract, helping to pay for legal defense costs and any resulting judgments or settlements.

Insurance does not prevent lawsuits from happening, but it does provide financial protection and resources for legal defense when they occur. By understanding the risks inherent in their industry and choosing the right insurance coverages, lumber and wood products manufacturers can mitigate potential financial losses from lawsuits.

Commercial Insurance And Business Industry Classification

Description for 2435: Hardwood Veneer And Plywood

Division D: Manufacturing | Major Group 24: Lumber And Wood Products, Except Furniture | Industry Group 243: Millwork, Veneer, Plywood, And Structural Wood

2435 Hardwood Veneer And Plywood: Establishments primarily engaged in producing commercial hardwood veneer and those primarily engaged in manufacturing commercial plywood or prefinished hardwood plywood. This includes non-wood backed or faced veneer and non-wood faced plywood, from veneer produced in the same establishment or from purchased veneer. Establishments primarily engaged in the production of veneer which is used in the same establishment for the manufacture of wood containers, such as fruit and vegetable baskets and wood boxes are classified in Industry Group 244.

  • Hardwood plywood composites
  • Hardwood veneer or plywood
  • Panels, hardwood plywood
  • Plywood, hardwood or hardwood faced
  • Prefinished hardwood plywood
  • Veneer mills, hardwood

Description for 2436: Softwood Veneer And Plywood

Division D: Manufacturing | Major Group 24: Lumber And Wood Products, Except Furniture | Industry Group 243: Millwork, Veneer, Plywood, And Structural Wood

2436 Softwood Veneer And Plywood: Establishments primarily engaged in producing commercial softwood veneer and plywood, from veneer produced in the same establishment or from purchased veneer. Establishments primarily engaged in producing commercial hardwood veneer and plywood are classified in Industry 2435. Establishments primarily engaged in the production of veneer which is used in the same establishment for the manufacture of wood containers such as fruit and vegetable baskets and wood boxes are classified in Industry Group 244.

  • Panels, softwood plywood
  • Plywood, softwood
  • Softwood plywood composites
  • Softwood veneer or plywood
  • Veneer mills, softwood

Description for 2439: Structural Wood Members, Not Elsewhere Classified

Division D: Manufacturing | Major Group 24: Lumber And Wood Products, Except Furniture | Industry Group 243: Millwork, Veneer, Plywood, And Structural Wood

2439 Structural Wood Members, Not Elsewhere Classified: Establishments primarily engaged in producing laminated or fabricated trusses, arches, and other structural members of lumber.

  • n/a

Lumber And Wood Products Manufacturers Insurance - The Bottom Line

All lumber and wood products manufacturers insurance policies are not the same - in fact they can differ widely in premiums and coverage. You can see if your business has the best fit insurance policies by talking to an experienced commercial insurance broker.

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.

Manufacturing Insurance

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.

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