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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:

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.

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.

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.

Small Business Information

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 InsuranceWhat 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 InsuranceWhat 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 InsuranceWhat 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 InsuranceWhat 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 InsuranceWhat 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 PoliciesWhat 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 InsuranceWhat 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 BondWhat 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
Small Business Commercial Insurance

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.

Manufacturing Insurance

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.

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