Going into business as a carpenter means the start of an exciting new career. But there are some things you need to take care of before you can start working, one of which is making sure you have the insurance you need to operate safely and legally. In this post, you will learn about the different types of insurance for carpenters.
Carpenters Insurance Requirements
As a carpenter, you are a type of contractor. In most states, you do not need to purchase general liability insurance or most other types of insurance to legally operate as a contractor. But you should check with your state to make sure there are no exceptions where you want to work.
If you have any employees, however, you must purchase workers’ compensation, regardless of which state you are working in.
Why You Need Business Insurance As A Carpenter
Even though most states do not require you to buy carpenter insurance, you should do so anyway. Imagine the following situations:
- You are repairing a roof, and one of your tools falls and hits someone in the head. They sue you for medical costs.
- You advise a customer about how they could DIY an aspect of a job, which they then screw up. They blame you for giving them poor advice.
- Someone vandalizes your work vehicle while you are on the job.
These are all examples of scenarios where carpenter insurance would help you to cover unexpected costs and keep your business running smoothly.
Types of Carpenter Insurance
There are many types of insurance available for carpenters. Here are some of the most popular types of policies:
- General liability insurance: This type of carpenter liability insurance coverage helps you cover the cost of damages to other people and their property. If you are just going to get one type of coverage for your business (other than workers’ comp), this is what you should get.
- Errors and omissions insurance: You can get this type of policy to help cover costs if a customer sues you for errors, omissions, or other types of negligence.
- Commercial auto: If you drive a dedicated commercial vehicle to work sites and back, you need a commercial auto policy to cover it (your personal auto policy will not cut it).
- Commercial property: With this type of policy, you can protect your own property.
- Tools and equipment: You may need a specialized policy to cover your tools and equipment as a carpenter. If they are stolen or damaged, the policy will help you repair or replace them so you can quickly get back to work.
- Business interruption insurance: Speaking of getting back to work, sometimes you may find yourself stuck without the ability to work because of something that went wrong. This type of policy can help cover lost income during some of these times.
- Business owners’ policy (BOP): Many carpenters purchase a business owners’ policy, which rolls together general liability insurance with commercial property insurance and/or business interruption insurance.
- Workers’ compensation: You are legally required to get workers’ compensation for any and all employees working under you as a carpenter, no matter your state.
While these are some of the most popular insurance policies for carpenters, there may be other types you want to apply for as well.
What Does Carpenter Insurance Cost?
NEXT writes that carpenter insurance can run as low as $41.67 monthly.
That said, there is some variation depending on the following factors.
- Types of policies: How many types of policies are you planning to buy to insure your business? The more you get, the more expensive your insurance costs will be. Sometimes being that thorough ends up being worth it though. Assess your risks and your budget and decide what makes the most sense for your business.
- Deductibles: Your deductible is the amount you have to pay when making a claim before your insurance starts to pay. The higher it is, the lower your monthly costs will be, and vice versa. You will usually have a choice for how high or low you want your deductible to be.
- Coverage amounts: Your coverage amount is the maximum that a policy will pay out. Raising this amount raises the price of your insurance, but can also be a big help if disaster strikes.
- Type of work: Not all carpentry jobs entail the same risks. You can expect the carrier to ask questions about the exact work you perform when determining your insurance rates.
- Area of operation: If you perform carpentry in risky settings, you may pay more for your insurance than you would if you are doing carpentry in relatively safe environments. Similarly, carpentry in a small area of service may be less expensive than carpentry in a large area of service.
- Size of business: The larger and more complex your carpentry business is, the higher the cost will be for carpenter insurance. Higher revenue also tends to result in higher insurance costs, as does a higher payroll if you need workers’ compensation.
- Value of equipment: When insuring your tools and equipment as a carpenter, their value will be a key consideration when determining the cost for coverage. Insuring more valuable equipment poses a higher risk for a carrier, resulting in higher costs for your insurance.
- Experience and track record: Carpenters who have been safely running their businesses for many years without making claims will usually qualify for better pricing than those who have less experience and/or many claims on their records.
- Bundling and discounts: There may be discounts you can qualify for with some carriers. A common example of a carpenter insurance discount is qualifying for a lower price by bundling together multiple policies.
- Underwriting guidelines: Each insurance company has its own proprietary methods for assessing risk and determining approval and pricing. Contact multiple companies for quotes so you can receive the most competitive pricing for carpenter insurance.
Where to Get Professional Carpentry Insurance
Now that you know more about the types of insurance for self employed carpenters as well as costs, let’s take a look at a couple of recommended carriers.
Progressive is among the top insurance companies in the US, and is best known for home and auto policies. But their small business policies are well worth a look. Here are the types of policies they offer to carpenters:
- General liability
- Commercial auto
- Workers’ compensation
Progressive offers some fantastic discounts and is especially great for bundling policies.
The insurance company NEXT focuses on small businesses exclusively, making them an excellent choice for carpenters and other contractors. They can connect you with these types of policies:
- General liability
- Errors and omissions
- Workers’ compensation
- Commercial auto
- Commercial property
- Tools and equipment
You will appreciate both the wide spectrum of coverages available in one place and the extensive experience NEXT has working with carpenters.
Get Your Carpenter Insurance Quote Now
To protect your livelihood as a carpenter, you need excellent insurance coverage at affordable rates. If you are ready to get the insurance you need to safeguard your business, click on any of the links in this post for a personalized quote.