Carpenter insurance: What is it and what does it cover?

What insurance does a carpentry business need?

There are a variety of insurance policies that cover carpentry businesses, including:

Commercial auto insurance: This covers a business’s financial responsibilities if a driver causes an accident while driving a business-owned or leased vehicle. Like personal car insurance, business auto insurance is a legal requirement in nearly every state.

General liability insurance: This covers third-party claims of bodily injury, property damage and advertising injury. It also covers a settlement or judgment with the injured party, as well as your legal fees and court costs.

Professional liability insurance: This is also called errors and omissions insurance and covers lawsuits claiming negligence, business error, misrepresentation and poor business advice. It pays for a settlement or judgment and your legal expenses.

Workers’ compensation insurance: This covers employees' medical treatment and partial lost wages if they get sick or injured at work. It’s required in most states for carpentry businesses with at least one employee on payroll.

Commercial umbrella: This offers liability protection beyond the maximum limits of your general liability,  commercial auto and other business insurance policies.

Business owner’s policy: This is commonly called BOP insurance and is a package of policies that include general liability, commercial property and business interruption insurance.

Contractor tools and equipment insurance: This is a more specific type of coverage that pays to replace or repair movable carpentry tools that are accidentally damaged, stolen or lost. Some insurance policies also cover tools and equipment rented for specific carpentry projects.

How much does carpentry insurance cost?

Here’s the average cost of carpentry insurance by policy type, based on rate data from small business insurance broker Insureon.

Factors that affect carpentry insurance premiums

The cost of carpentry insurance depends on a variety of factors, including:

• Location
• Number of employees
• Revenue
• Claims history
• Policy type
• Coverage limits
• Deductibles
• Insurance company

How to compare carpentry business insurance companies to get the best coverage

Dozens of insurance companies sell coverage for carpentry businesses. However, not all insurers are created equal. To find the best carpentry small business insurance carrier, it’s important to compare multiple companies. Follow these tips to find the best insurance company for your business:

1. Look at coverage options: Every carpentry company has different insurance requirements. When comparing carriers, look at the coverage options and choose an insurer that offers the types and amounts of coverage you need based on your potential risks.
2. Consider third-party ratings: These can help you better understand an insurer’s customer service reputation and overall customer satisfaction. It’s a good idea to check insurance company ratings from reputable organizations such as J.D. Power, which does customer satisfaction rankings, and the National Association of Insurance Commissioners (NAIC), which tracks customer complaints.
3. Know the insurer’s financial strength: Choose an insurance company with an excellent (A) or superior (A+, A++) financial strength rating from AM Best. Financially stable insurers can meet policyholder obligations and pay claims. Companies that aren’t financially strong are at a higher risk of bankruptcy and may have a harder time paying claims.
4. Check out the carrier’s online tools: If you prefer to handle your insurance needs online, look for carriers that offer online tools, such as online policy management, online claims, live chat and risk management resources.
5. Shop around: Before purchasing business insurance, get personalized rate quotes from at least three carriers. This will help you find the cheapest premium for the type and amount of coverage you want.

How to get the best coverage for your small business

Use these strategies to get the best insurance coverage for your carpentry business:

1. Consider your unique risks: Think about the risks that your business faces based on your industry, services, location and number of employees. Purchase policies that cover the potential risks you face, and choose coverage limits that offer adequate financial protection.
2. Find out what coverages are required: Your business might be required to carry certain types of insurance to satisfy local laws, client requirements or lease agreements. Ensure you get the policies you need and provide certificates of insurance to relevant stakeholders, like your landlord.
3. Read the fine print of your policy: Every commercial insurance policy has different exclusions. It’s important to read the fine print of your policy so you understand what is and isn’t covered. You might need to purchase other policies or add endorsements to fill gaps in your basic coverage.
4. Compare quotes: The cost of business insurance depends on many factors, and some policy types are more expensive than others. Before you purchase any insurance policy, compare quotes from at least a few different insurance companies to find the best coverage at the most affordable rate.

Small business insurance companies that serve carpentry businesses

Many reputable insurance carriers sell coverage to carpentry businesses, including:

• BiBerk: BiBerk is owned by Berkshire Hathaway, which operates several carriers, including Geico. BiBerk’s Construction and General Contractor insurance is designed to fit the needs of finishing carpenters, framers, cabinet makers, handymen and other skilled tradespeople. BiBerk only offers general liability, worker’s comp, business owners policies, commercial auto, umbrella and cyber insurance.
• Next: Next offers small business insurance policies for both carpenters and handypeople, such as general liability, commercial auto, tools and equipment, and workers’ comp. The company offers online quotes.
• Progressive Commercial: Progressive Commercial is the largest provider of small business insurance in the U.S., and it has been offering coverage for more than a half-century. Its carpenter insurance is designed for craftspeople like framers, cabinet makers and flooring contractors. All the standard business coverages are offered, including protection against cybercrime losses.
• Thimble: Thimble specializes in small business insurance, offering policies with terms by the job, by the day or by the hour. Customers must use the company app or website to begin the quote process, and third-party carriers like Markel Insurance Co. and National Specialty Insurance Co. underwrite most policies. Options include business interruption insurance and hired and non-auto coverage.