Woodworker insurance – cost and coverage

Whenever you budget the expenses of your business, Woodworker insurance must be included in the list because you can’t always know exactly what can happen in the future.

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With the protection provided by insurance against accidents and all the other sorts of insurance we will tell you about, you can protect your business and yourself in case something unforeseen happens.

Like any business owner, for your Woodworker enterprise, you must consider how much financial liability you are taking on.

If your Woodworker business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a complete wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the upshots of their actions. 

Woodworker Insurance

In this article, we are giving very general guidelines for growing businesses to highlight what the main kinds of insurance that you need are, and where available, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your Woodworker business?

What this means, for any Woodworker business owner, is that if some company claims that your actions caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your Woodworker business is not protected by laws in the same way as states are, where laws can place a “cap” on the maximum level of liability.

In some states, like Montana, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the duty of the jury to award whatever amount they deem appropriate, even sometimes giving a claimant more than they have sued for.

When you are running your Woodworker operations, you can’t escape responsibility for the results of your actions.

Even more importantly, unless you have spent up-front the money necessary to have your business running as an LLC, all of that liability belongs to you as a person.

What does Woodworker insurance protect you from?

For your Woodworker business, the most important sorts of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some official kinds of insurance that various states require.

In the next few paragraphs, we will explain the most important points any Woodworker business owner should consider when negotiating the insurance needed.

The main headings of insurance for your Woodworker businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any Woodworker business is dealing directly with customers, and that means you usually have the danger that some accident can happen to them themselves or else something of theirs can be damaged.

In such a case, they can require compensation.

General liability insurance policy for your Woodworker business insures you against claims coming from injury to customers or damage to their property.

It protects your Woodworker business from the claims themselves and also to any associated court costs and legal fees of the lawsuits.

In many cases, it should help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The normal level of general liability insurance for your Woodworker business would be with a cap of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your Woodworker insurance operations.

Professional liability insurance for your Woodworker business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Woodworker business for them, you can quickly be involved in a monetary claim.

Even if the matter against you is judged in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Almost all small Woodworker business should have enough professional liability insurance to cover an individual claim of $25,000, with annual cover of $50,000.

See the table in the cost of Woodworker insurance section below for average prices of professional liability insurance for your Woodworker operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that clients may claim that the results didn’t meet your description of function, or that your guidance was basically incorrect.

You need to know the particular laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held liable for results caused by products claimed to be defective.

To cover yourself against any likely lawsuit, you need Product liability insurance for Woodworker

Only you can determine exactly how much insurance you should get.

Best advice is to consult with experienced insurance agents, brokers or company representatives for support.

Commercial insurance

Commercial vehicle insurance for your Woodworker business

Be careful! – almost all policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the car is being used for business purposes.

The proper way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a designated commercial vehicle insurance package.

Commercial van policies guarantee the value of any vehicle in case of accident, malicious damage, fire, or theft.

As well, in case of any accident, the van itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your truck is involved in a crash.

Most states, other than Virginia and New Hampshire, mandate this type of insurance.

The wanted value of the insurance is worked-out for the depreciated value of the vehicle, and your declared level of cover of contents. 

Tools and Equipment insurance

Since your Woodworker business needs specialized and dedicated equipment, you will realize how much it can cost to replace it in case of any damage, loss, or theft.

The tools may be subject to malicious damage, deliberate fire, theft, other such unpredicted acts.

In addition, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such specialized gear quickly out of your own pocket, you must have full-level equipment insurance so that you can immediately buy everything needed to keep your Woodworker business running.

It is difficult to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your Woodworker business’ equipment.

Commercial Property insurance

Any Woodworker business that owns or rents space in a building must have a commercial property insurance policy.

If you own the property, you probably have a substantial capital investment, in addition to a big liability if there’s a mortgage.

Any physical building location should carry insurance coverage for the value of the premises and contents against accidental occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your Woodworker business operates in areas of high risk, like Florida or North Carolina, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where unlimited cold snaps can cause damage to outer coverings of Woodworker business premises, there is a need for more extra cover than in warmer climes.

Whereas the level of cover depends completely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Woodworker insurance section below to give some estimate of the average prices per million dollars of property insurance for your Woodworker business.

Temporary insurance by month, week or day for your Woodworker business

Is your Woodworker business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes excellent sense. Business insurance by the month, day, or week – temporary insurance for Woodworker – are special policies where you can cover a designated period when you want to be covered.

By only paying for that period of cover, you will save by having reduced premiums but still having adequate risk cover.

The important feature of short-term insurance is that you buy the cover for a defined period – a nominated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of larger business activity, get the existing cover increased.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your Woodworker business

You have the choice to combine several of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP combines commercial property and public liability insurance by amalgamating these coverages into one insurance policy, which can save you money.

BOP insurance will shield you if any claims of injury or property damage are made.

It is mostly the right choice for small and medium-sized Woodworker businesses, such as yours.

There are two limits that will rule whether BOP is suitable for your own business.

BOPs do not cover your professional liability or commercial vehicle cover.

Also, the size of your business will rule whether you are eligible to take out BOP cover.

The typical business that is allowed to take a BOP policy must have fewer than one hundred employees, and maximum five million dollars in annual sales.

In addition, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your Woodworker business employees

In most states, it is mandatory to have workers compensation insurance when your Woodworker business has one or more employees.

Workers compensation insurance covers the enterprise against any costs that arise if an employee experiences an injury or becomes sick as a result of work.

The benefits include medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s regulations in this regard can leave you as the employer obliged to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only allow coverage from the government-run monopoly state funds.

In these states, you may not obtain your workers compensation obligations from private insurance companies.

Workers compensation charges are computed based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must refer to the relevant authorities in your state.

Average costs of these types of insurance

Although every Woodworker insurance level is unique, there are enough examples of average quotes from insurance companies for us to give appropriate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an insurance representative what’s relevant for your business.

The list below is of annual premiums we have researched for the main types of insurance your Woodworker businesses needs.

Types of insurance Price range
General liability insurance $730 – $922
Commercial insurance $1009 – $2644
Commercial vehicle insurance $1616 – $2781
Product liability insurance $212 – $802
Public liability insurance $256 – $654
Equipment insurance $369 – $1215

Cost of insurance for your Woodworker operations depends on many different factors.

We have calculated these figures for small freelance Woodworker businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, but in smaller states like Oregon, they will be about 20%-30% less.

The location and size and type of your Woodworker business can have a big effect on the cost of different policies.

You should consult with professional insurance agents and brokers, or insurance company representatives.

In addition you can let the internet do the work for you by looking for insurance companies near where your business is located.

Another reliable source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for Woodworker operations?

This is a general term used to describe standard insurance policies designed to protect Woodworker business owners from risks like bodily injury, property damage, claims of negligence.

Does my Woodworker business have to have insurance?

Some of the forms of insurance are not mandatory for you to operate your business, but they can protect you from risks in your business operations.

Several other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small Woodworker business insurance policy cover?

Liability insurance provides coverage against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.

The specific cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for Woodworker insurance.

How much will Woodworker business insurance cost?

As well as the size of the business, several other factors, such as location and claims history, are used to determine your policy’s cost.

You should consult with professional insurance agents and brokers, or insurance company representatives.

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