Woodworking Manufacturers Insurance Policy Information
Woodworking Manufacturers Insurance. Woodworking has never gone out of fashion as numerous other materials, from plastics to metals, have taken over increasing shares of the furniture market - but the industry has indeed evolved a great deal.
Some woodworkers may still live up to the images in the heads of many laypeople, sawing and sanding pieces by hand, but on the whole, the woodworking industry has become a technologically-advanced place.
Woodworking shops produce a variety of products, including cabinets, picture frames, shelving, and other products made of solid wood, veneered plywood, or particleboard. The finished product may be pre-assembled, or assembled during installation by the customer or a contractor.
The woodworking shop receives wood products in specific lengths and widths. The wood is seasoned (dried either in kilns or in the yard), then cut, planed, sanded, assembled with glue or hardware, stained, varnished, and painted or otherwise finished.
Modern production work will usually employ CNC workstations (computerized machining), but custom work may be done by hand. Custom manufacturers may also install their product. Some cabinet makers may also own a retail outlet.
If you own and operate a woodworking shop, you are likely to make use of numerous complex and costly tools, ranging from sawmills to drill presses, wood-nailing machines, and even CNC machines. Surrounded by this incredible equipment, woodworking shops can never let their minds wander too far from the numerous risks they face. The adhesives woodworkers use over the course of their jobs, too, can pose serious hazards.
Circumstances beyond your control could devastate your woodworking shop - unless, of course, you are protected by the right type of woodworking manufacturers insurance coverage. That is why you should read on to find out what essential insurance needs companies within the woodworking industry can never ignore.
Woodworking 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 woodworking manufacturing insurance questions:
- How Much Does Woodworking Manufacturers Insurance Cost?
- Why Do Woodworkers Need Insurance?
- What Type Of Insurance Do Woodworking Manufacturers Need?
How Much Does Woodworking Manufacturers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small woodworking manufacturing businesses ranges from $57 to $79 per month based on location, size, revenue, claims history and more.
Why Do Woodworkers Need Insurance?
Woodworking shops may range from small and even family-run businesses to booming operations that may only handle specific portions of the secondary wood products industry. They will be vulnerable to some of the same pitfalls as other commercial ventures, as well as facing potential threats more specific to the woodworking industry itself.
Theft and vandalism (including arson) are always a risk, for example. It is easy to push the risk of acts of nature, natural disasters such as floods or wildfires that could damage your entire inventory, to the back of your mind - but they too can strike.
Should an essential piece of machinery become damaged or break down, you may need to interrupt your production process, placing your bottom line in serious peril. With so many power tools, woodworking shops should also always be prepared for the possibility that an employee could be seriously injured in the workplace.
These and other types of threats explain why adequate woodworking manufacturers insurance coverage cannot be overlooked.
What Type Of Insurance Do Woodworking Manufacturers Need?
Every commercial venture has unique insurance needs. Yours depend on several factors, ranging from the type of power tools and electronic equipment you use in the manufacture of wood products, to the size and location of your business, and its number of employees.
To find out what your exact woodworking manufacturers insurance needs are, you will want to consult a seasoned agent who specializes in commercial insurance. The needs of small and large businesses will vary, however, most woodworkers will require the following types of insurance:
- General Liability: This kind of insurance is there to prevent financial losses resulting from third party personal injury and property damage liability, and covers legal expenses. Circumstances that could cause a woodworking shop to rely on general liability insurance would include a third party visiting your premises tripping on a piece of cord and becoming hurt, for example, or accidental damage to customers' properties as you deliver an order.
- Commercial Property: This type of insurance is another must-have. Should a criminal act, accident, or act of nature damage your building or the assets, including machinery, within, commercial property insurance will compensate your company for the losses as well as lost revenue should you have to interrupt production. Equipment breakdown insurance is a sub-type that you will want to investigate if you have valuable equipment onsite.
- Workers' Compensation: All but the very smallest companies will need to carry workers comp insurance. It covers medical expenses and lost wages should a worker sustain work-related injuries, both acute injuries such as power tool accidents, and long-term conditions such as repetitive stress injury.
These types of woodworking manufacturers insurance are only examples of the kind of coverage you will need as a woodworker. That is why you cannot do without a commercial insurance broker.
When you consult the agent of your choice, also ask them about auto insurance, which any company that uses vehicles needs, and product liability insurance, which could protect your company from liability should a consumer be harmed by one of your products.
To make sure your needs are met properly, consult an agent who specializes in commercial insurance.
Woodworking Manufacturing's Risks & Exposures
Premises liability exposure at the plant is normally low as access by visitors is limited. If tours are given or if there is a retail outlet on the premises, visitors may be injured by slips, trips, falls, or flying debris.
The storage of wood in the open could pose 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.
If the manufacturer offers retail delivery or installation, there may be frequent small property damage claims.
Products liability exposure is based on the final use of the product as well as whether the manufacturer prepares the use specifications. Workmanship errors, such as wood splinters, protruding nails, or poorly cut openings, present nuisance hazards. Items designed to support a customer's weight can fail, resulting in bodily injury.
Environmental impairment exposures may be significant due to possible contamination of ground, air, and water from sawdust, chemicals, paint, and varnishes generated by 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 very high. Injuries from production machinery are common, as are slips, trips, falls, back injuries from lifting, foreign objects in the eye due to flying wood chips and dust, hearing loss from noise, and repetitive motion losses. There should be safety training and protective equipment.
Workstations should be ergonomically designed. Amputations can occur from working with saws. 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 eye, skin, and lung irritation.
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 storage of 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 carried out 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 indirect.
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 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, theft, collision and overturn. If the manufacturer installs products, an installation floater should be considered.
Business auto exposure is high if the manufacturer transports raw materials or finished products. Proper loading and tie down procedures are essential to prevent overturn and /or release of lumber. The risk increases if there is a potential for long haul or time pressures on 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. 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
- SIC CODE: 2499 Wood Products, Not Elsewhere Classified
- NAICS CODE: 321999 All Other Miscellaneous Wood Product Manufacturing
- Suggested ISO General Liability Code(s): 59985, 59986
- Suggested Workers Compensation Code(s): 2841, 2802
Description for 2499: Wood Products, Not Elsewhere Classified
Division D: Manufacturing | Major Group 24: Lumber And Wood Products, Except Furniture | Industry Group 249: Miscellaneous Wood Products
2499 Wood Products, Not Elsewhere Classified: Establishments primarily engaged in manufacturing miscellaneous wood products, not elsewhere classified, and products from rattan, reed, splint, straw, veneer, veneer strips, wicker, and willow.
- Applicators, wood
- Bakers' equipment, wood
- Baskets, except fruit, vegetable, fish, and bait: (e.g., rattan, reed,
- Battery separators, wood
- Bearings, wood
- Beekeeping supplies, wood
- Bentwood (steam bent) products, except furniture
- Blocks, tackle: wood
- Blocks, tailors' pressing: wood
- Boards, bulletin: wood and cork
- Boards- clip, ironing, meat, and pastry-wood
- Boot and shoe lasts, regardless of material
- Bowls, wood: turned and shaped
- Briquettes, sawdust or bagasse: non-petroleum binder
- Bungs, wood
- Buoys, cork
- Bushings, wood
- Cane, chair: woven of reed or rattan
- Carpets, cork
- Cloth winding reels, wood
- Clothes dryers (clothes horses), wood
- Clothes drying frames, wood
- Clothes pins, wood
- Clubs, police: wood
- Cooling towers, wood or wood and sheet metal combination
- Cork products
- Corks, bottle
- Covers, bottle and demijohn: willow, rattan, and reed
- Curtain stretchers, wood
- Dishes, wood
- Display forms for boots and shoes, regardless of material
- Dowels, wood
- Extension planks, wood
- Faucets, wood
- Fellies, wood
- Fencing, wood: except rough pickets, poles, and rails
- Firewood and fuel wood containing fuel binder
- Flour, wood
- Frames: medallion, mirror, photograph, and picture-wood or metal
- Furniture inlays (veneers)
- Garment hangers, wood
- Gavels, wood
- Grain measures, wood: turned and shaped
- Hammers, meat: wood
- Hampers, laundry: rattan, reed, splint, veneer, and willow
- Handles, wood: turned and shaped
- Hubs, wood
- Insulating materials, cork
- Jacks, ladder: wood
- Knobs, wood
- Ladders, wood
- Last sole patterns, regardless of material
- Letters, wood
- Life preservers, cork
- Mallets, wood
- Market baskets, except fruit and vegetable: veneer and splint
- Marquetry, wood
- Mashers, potato: wood
- Masts, wood
- Mauls, wood
- Moldings, picture frame: finished
- Novelties, wood fiber
- Oars, wood
- Pads, table: rattan, reed, and willow
- Paint sticks, wood
- Pencil slats
- Plugs wood
- Poles wood: e.g., clothesline, tent, flag
- Pressed logs of sawdust and other wood particles, non-petroleum
- Pulleys, wood
- Racks, for drying clothes: wood
- Rattan ware, except furniture
- Reed ware, except furniture
- Reels cloth winding wood
- Reels for drying clothes: wood
- Reels, plywood
- Rollers, wood
- Rolling pins, wood
- Rules and rulers: wood, except slide
- Saddle trees, wood
- Sawdust, reground
- Scaffolds, wood
- Scoops, wood
- Seat covers, rattan
- Seats, toilet: wood
- Shoe stretchers, regardless of material
- Shoe trees, regardless of material
- Signboards, wood
- Skewers, wood
- Snow fence
- Spars, wood
- Spigots, wood
- Spokes, wood
- Spools, except for textile machinery: wood
- Stakes, surveyors': wood
- Step-ladders, wood
- Stoppers, cork
- Tile, cork
- Tool handles, wood: turned and shaped
- Toothpicks, wood
- Trays: wood, wicker, and bagasse
- Trophy bases, wood
- Vats, wood: except coopered
- Washboards, wood and part wood
- Webbing: cane, reed, and rattan
- Willow ware, except furniture
- Wood, except furniture: turned and carved
- Woodenware, kitchen and household
- Yardsticks, wood
Woodworking Manufacturers Insurance - The Bottom Line
Woodworking manufacturers insurance policies can vary widely coverage, exclusions and cost. You can see if your manufacturing operation 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.
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.