Essential Business Insurance For Custom Architectural Woodwork And Millwork Manufacturing Companies (NAICS 337212)

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An overview of the top insurance policies custom woodwork manufacturers should consider including general liability, property, workers' compensation, commercial auto, commercial umbrella and more.

Key Takeaways

  • General liability insurance protects against lawsuits for injuries in your facility from machinery/tools or defects in manufactured goods.
  • Property insurance covers damage to buildings, equipment and inventory from risks like fire and theft.
  • Workers’ compensation covers medical bills and lost wages if employees are injured on the job.
  • Commercial auto insurance protects your vehicles and provides liability coverage for accidents.
  • Business interruption insurance covers lost income if property damage halts operations.
  • Professional liability protects against lawsuits alleging defective work or design errors.
  • Directors and officers insurance protects personal assets of directors/officers from lawsuits
  • Employment practices liability insurance protects against employee lawsuits
  • Cyber liability insurance given risks of data breaches and system outages

Introduction

As a custom architectural woodwork or millwork manufacturing business, there are several key insurance policies you should have in place to protect your operations from financial risks. This article covers the top business insurances custom manufacturers should consider based on common exposures and claims data for this industry.

General Liability Insurance

General liability insurance provides important protection for custom architectural woodwork and millwork manufacturing businesses. It protects against costly lawsuits from injuries on the worksite or product liability claims if a customer is hurt by manufactured goods. General liability insurance also covers legal defense costs, even for unfounded claims, as well as contractual obligations and damage to customers’ property. Given the risks of accidents in woodworking facilities and potential issues with products, general liability coverage minimizes financial risk for these types of companies.

Category List
Benefits
  • Protects against claims of bodily injury or property damage from customers, visitors or others
  • Covers legal costs if you’re sued for damages related to your business operations
  • Covers defense costs even if allegations against you turn out to be groundless or fraudulent
  • Provides protection from costly lawsuits should someone get hurt on your property or by using your products
  • Covers claims related to contractual liability if you damage someone else’s property or don’t fulfill contractual obligations
  • Cover for medical expenses if an employee or visitor is injured on your premises
  • Protects your business assets in case of a lawsuit by separating your personal assets from those of your business
  • Coverage for damage to third party property or work from accidents or failures
Use Cases
  • Bodily injury or property damage claims from customers or visitors at your facility
  • Product liability claims if a product you manufactured caused bodily injury or property damage
  • Errors and omissions claims if you provided incorrect design or installation advice that led to losses

Based on industry data and average claims, the estimated average annual pricing for general liability insurance for businesses in the Custom Architectural Woodwork and Millwork Manufacturing industry with NAICS code 337212 is $3,500. This was calculated based on factors such as the types of products and materials being used, machinery involved, average claims for the industry, number of employees. The price provided is just an estimate and individual business quotes may vary based on their unique risk factors and profile.

Estimated Pricing: $3,500

Property Insurance

Property insurance provides essential risk management protection for custom woodworking businesses. It safeguards their specialized equipment, inventory, facilities and cash flow if these valuable assets are damaged by accidents or natural disasters through no fault of their own. Liability insurance is also crucial to protect the business from claims of injuries on their premises or property damage caused to others. Comprehensive coverage ensures they can continue operating smoothly without financial disruption from insured losses.

Category List
Benefits
  • Protection against property loss or damage from fire, lightning, windstorms, hail, explosion, smoke, theft or vandalism
  • Reimbursement for equipment, inventory, buildings, vehicles and other insured property that is damaged or destroyed
  • Coverage for loss of business income if property is damaged and unable to generate revenue
  • Liability protection if a customer or employee is injured on your property
  • Protection for specialized woodworking equipment that may be expensive to replace like CNC machines, industrial saws, sanders, etc.
  • Coverage for materials inventory including raw wood, hardware, finishes and other supplies that could be damaged
  • Replacement cost coverage to fully repair or rebuild property without deductions for depreciation
  • Lost income protection if a fire, flood or other covered event damages the facility and halts production for a period of time
  • Coverage for employees’ tools if they are lost, stolen or damaged on site
  • Protection for valuable samples, prototypes, drawings and designs against loss
  • Defense coverage if the business is sued by a third party over injuries or property damage on their premises
  • Expert risk management consulting services from insurance providers to help prevent losses
Use Cases
  • Protection against fire damage to furniture, fixtures, equipment and inventory
  • Coverage for water damage from things like burst pipes or flooding
  • Reimbursement for theft of valuable machinery, tools or raw materials
  • Replacement costs for buildings and structures if they are damaged or destroyed
  • Business interruption coverage to continue paying employees if operations are halted by a covered loss

Based on typical property insurance rates for manufacturing businesses that work with wood materials, the average estimated annual pricing would be between $3 to $5 per $100 of covered property value. Factors that would affect the final rate include things like the business’s loss history, protective devices/equipment, fire suppression systems, and building construction/occupancy. For a business with $2 million in covered property, the estimated annual property insurance pricing would be $60,000 to $100,000.

Estimated Pricing: $60,000 to $100,000

Workers Compensation Insurance

Workers compensation insurance provides essential protections for both employees and employers in high-risk industries like custom architectural woodwork and millwork manufacturing. On-the-job injuries are a real risk in this industry due to the use of heavy machinery and tools. The top benefits of workers compensation insurance for this industry include covering medical bills, lost wages, and rehabilitation costs for injured employees. It also protects companies from costly lawsuits if negligence cannot be proven in court. Pricing for workers compensation insurance in this industry averages around $2.50 per $100 of payroll.

Category List
Benefits
  • Provides protection if an employee is injured on the job
  • Covers medical bills and lost wages for injured employees
  • Reduces the risks and costs of lawsuits for on-the-job injuries
  • Covers rehabilitation costs if an injury prevents an employee from returning to their original job
  • Protects the company from having to financially compensate injured employees if negligence cannot be proven in court
  • Provides peace of mind knowing employees will receive support for on-the-job injuries without having to prove fault
Use Cases
  • Protect against liability claims if an employee is injured on the job
  • Provide medical benefits to injured employees such as medical expenses, hospitalization expenses and lost wages
  • Cover lost wages, replacement services and death benefits if an employee is unable to work or killed due to a work-related injury or illness
  • Protect the company from financial losses and lawsuits that could result from a worker injury caused by negligence on the job

Based on national average data, the estimated average pricing for workers compensation insurance for businesses in the custom architectural woodwork and millwork manufacturing industry with NAICS code 337212 is around $2.50 per $100 of payroll. This rate is calculated based on the industry risk factor, common claims made, average injuries sustained, and insurance company’s profit margin.

Estimated Pricing: $2.50/per $100 of payroll

Commercial Auto Insurance

“Commercial auto insurance provides important liability and physical damage coverage for vehicles used in custom architectural woodwork and millwork manufacturing businesses. It protects against costly lawsuits and ensures operations can continue even after an accident. Commercial auto policies also cover expenses like medical bills, rental cars, and lost equipment usage to help minimize financial impacts.”

Category List
Benefits
  • Protects against third-party liability claims if an employee is in an accident while driving a company vehicle
  • Covers medical bills and property damage to other vehicles if your vehicle is in an accident
  • Replaces your vehicle if it’s totaled in an accident
  • Covers rental car costs while your vehicle is being repaired from an accident
  • Covers loss of use if your vehicle is in the shop for repairs
  • Covers delivery of product and materials between jobsites
Use Cases
  • Insuring company vehicles used to transport materials, employees, and finished products
  • Insuring delivery trucks that deliver finished products to construction sites or customers
  • Insuring equipment transport vehicles that carry large equipment or machinery
  • Insuring service vehicles used by technicians to visit customer sites for installation or repairs
  • Providing non-owned auto liability coverage for employees’ personal vehicles used for company business

Based on industry averages, the estimated average annual pricing for commercial auto insurance for businesses in the custom architectural woodwork and millwork manufacturing industry with NAICS code 337212 is around $2,500. This pricing was derived from looking at typical fleet sizes, vehicle types, average claims data, locations, and other risk factors for this industry. Vehicles used typically include light duty trucks, cargo vans, and service vehicles.

Estimated Pricing: $2,500

Commercial Umbrella Insurance

Commercial umbrella insurance provides additional liability protection for businesses in industries like custom architectural woodwork and millwork manufacturing that face risks of expensive lawsuits. It protects against claims exceeding the limits of underlying general liability and other primary policies in a cost effective way. Umbrella insurance is especially important for manufacturers to have sufficient protection for risks from equipment malfunctions, injuries, and product defects that could lead to costly claims. It also protects business owners and management from personal liability in lawsuits.

Category List
Benefits
  • Additional liability protection above the limits of underlying commercial general liability and auto liability policies
  • Protection against costly legal defense fees if sued for damages over the insured limit of the underlying policies
  • Ability to increase coverage limits to raise protection for physical assets, inventory, equipment and property
  • Covers liability claims not included in underlying policies like libel, slander, discrimination
  • Provides cost-effective way to obtain higher liability limits compared to increasing limits on each separate underlying policy
  • Coverage for acts that cause bodily injury or property damage that may not be covered under the business’ standard insurance policies
  • Protection for business owners and executives if the company is sued for damages they may be personally liable for
  • Protection against a single large lawsuit that exceeds the liability limits of the underlying auto and general liability policies
Use Cases
  • Covers losses exceeding the limits of the underlying commercial general liability, auto liability, employers liability and any other primary insurance policies
  • Adds protection for claims involving completed operations, product liability, and personal and advertising injuries
  • Provides additional limits when primary liability limits are exhausted
  • Covers claims from employees, customers, contractors and the general public
  • Protects business owners and management from costly lawsuits

Based on typical rates for commercial umbrella insurance, businesses in the custom architectural woodwork and millwork manufacturing industry with NAICS code 337212 can expect to pay around $1.50 – $2.50 per $100 of commercial general liability limits, with a minimum premium of $1,000 – $2,500. Factors like payroll, number of employees, losses, and premium size of the underlying general liability policy will impact the final umbrella insurance pricing.

Estimated Pricing: $1,500 – $2,500

Business Interruption Insurance

Business interruption insurance provides an important layer of financial protection for businesses that could experience disruptions to normal operations due to property damage or other covered perils. It helps maintain revenue streams and ability to fulfill future commitments if a temporary shutdown is required for repairs or to move to an alternate location.

For custom architectural woodwork and millwork manufacturing businesses in particular, business interruption insurance is crucial since facilities house expensive machinery and continuous operations are needed to complete custom fabrication orders on time. Temporary closures could otherwise lead to lost clients and revenues if projects fall behind schedule. Pricing for this industry typically ranges from 0.5-1% of annual revenues, or $25,000-$50,000 for a business with $5 million in annual sales.

Category List
Benefits
  • Provides income if your business has to temporarily shut down operations due to property damage
  • Covers additional expenses like equipment rental needed to continue operations elsewhere
  • Compensates for lost profits if you have to close your business temporarily
  • Helps maintain cash flow so you can continue paying employees and other business expenses
  • Covers extra expenses to move to a temporary work location if your current facility is damaged
  • Reimburses rebuilding costs like repairs or installing upgraded equipment after property damage
  • Covers loss of income from cancelled customer orders or projects if you can’t complete work on time due to a disruption
  • Covers loss of income from future booked orders or contracts for your company’s woodwork/millwork services if you have to close temporarily
Use Cases
  • Protect against loss of income/revenue if the business suffers property damage from events like fire, storms or equipment failures and needs to shut down for repairs
  • Cover additional costs like renting temporary space if the primary facility cannot be used during repairs after covered damage events
  • Provide funds to pay employees and cover other operating expenses if business operations are interrupted by events like utility outages until full operations can resume

Business interruption insurance for custom architectural woodwork and millwork manufacturing businesses with NAICS code 337212 is typically priced at around 0.5-1% of annual revenues. Factors like location, size of operations, and loss history are considered. For a typical business in this industry with $5 million in annual revenues, business interruption insurance would be priced between $25,000-50,000 per year.

Estimated Pricing: $25,000-50,000

Directors And Officers Insurance

Directors and officers liability insurance, also known as D&O insurance, protects the personal assets of corporate directors and officers from liability claims filed by shareholders, employees, or outside parties involving alleged wrongful acts in their roles. It covers legal defense costs and settlement payments if the director or officer is found liable in a lawsuit. D&O insurance also provides coverage for employment practices liability claims such as wrongful termination, discrimination, and harassment. Common uses of D&O insurance include protection against shareholder lawsuits alleging mismanagement or breach of fiduciary duty, defense costs reimbursement if a director or officer is sued, and coverage for regulatory actions brought by the Securities and Exchange Commission or other government agencies.

Category List
Benefits
  • Protects directors and officers from lawsuits alleging wrongful acts
  • Covers legal costs if a lawsuit is filed against a director or officer
  • Covers monetary judgements or settlement costs if the director or officer loses the lawsuit
  • Helps the company recruit and retain qualified directors and officers by protecting their personal assets
  • Provides protection against employment claims like wrongful termination or discrimination
  • Insulates the company from financial losses or reputational damage due to the actions of its leaders
Use Cases
  • Protection against shareholder lawsuits alleging mismanagement or breach of fiduciary duty
  • Defense costs reimbursement if a director or officer is sued
  • Coverage for employment practices liability claims like wrongful termination, discrimination, harassment
  • Coverage for regulatory actions brought by the Securities and Exchange Commission or other government agencies

Based on industry research and analysis, the estimated average annual premium for Directors And Officers Insurance for businesses in the Custom Architectural Woodwork and Millwork Manufacturing industry (NAICS Code: 337212) is around $4,000 – $5,000 per year. This price range was derived from obtaining multiple quotes from insurance providers for sample medium sized businesses in this industry with annual revenues between $5-10 million and 10-25 employees. The premium amount can vary depending on factors like the size of the business, annual revenues, number of employees, claims history, and additional insurance riders/coverage amounts.

Estimated Pricing: $4,000 – $5,000

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, protects businesses in the Custom Architectural Woodwork and Millwork Manufacturing industry from financial losses due to negligent acts, errors, or omissions in their work. It covers legal expenses and claims resulting from defective work or design that causes property damage or bodily injury. Some key benefits of professional liability insurance for this industry include protecting against lawsuits from defective or faulty work, covering legal fees and costs if sued, defending against allegations of poor workmanship or material defects, maintaining customer confidence knowing the business is protected, and providing peace of mind knowing the business is protected from financial losses.

Category List
Benefits
  • Protection against lawsuits from defective or faulty work
  • Coverage for legal fees and legal costs if sued
  • Defense against allegations of poor workmanship, material defects, or design errors
  • Protection for business ownership, employees, and subcontractors
  • Maintain customer confidence and trust knowing the business is protected
  • Peace of mind knowing the business is protected from financial losses
  • Ability to meet contractual insurance requirements needed to win bids and contracts
  • Reduce stress and allow business owners to focus on running operations
Use Cases
  • Defend against lawsuits from clients claiming defective or negligent work
  • Cover costs and damages awarded in a lawsuit against the business
  • Protect the business from third party injuries or property damage claims resulting from work
  • Cover liability claims if a client’s project has construction delays due to the manufacturer’s errors or omissions

Based on industry data, the estimated average annual pricing for professional liability insurance for businesses in the Custom Architectural Woodwork and Millwork Manufacturing with NAICS Code 337212 is around $5,000 – $10,000 per year. This pricing range was derived from analyzing insurance rates from several top providers for this industry while taking into account factors like annual revenue, number of employees, claims history, and types of services offered.

Estimated Pricing: $5,000 – $10,000

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) protects businesses in the custom woodwork industry from expensive employee lawsuits. EPLI provides coverage for legal costs associated with defending against wrongful termination, discrimination, harassment and other employment-related claims filed by current or former employees. It also pays settlements and judgments if the employer is found liable. EPLI offers protection for common issues like violations of fair labor standards, failure to accommodate disabilities, lack of proper employee documentation, and claims regarding unsafe working conditions. Premiums are usually based on payroll and number of employees, with an average premium estimated around $3,500 for a typical woodwork manufacturing business.

Category List
Benefits
  • Provides defense against employee lawsuits such as wrongful termination, discrimination, harassment and retaliation claims
  • Covers settlement costs and judgment amounts if a lawsuit results in the employer’s liability
  • Protects business from reputation damage due to allegations in a lawsuit
  • Reduces stress of facing costly litigation process
  • Provides access to risk management services and training to help prevent costly claims
  • Allows businesses to attract and retain quality employees by demonstrating commitment to protecting their rights
  • Insurance carrier’s experienced lawyers and claims adjusters handle litigation to achieve best possible outcome
  • Covers legal fees for defense of all covered claims, regardless of merit which can save thousands in legal costs
  • Policy typically covers harassment, discrimination and wrongful termination claims from past, present and future employees for a set policy period
Use Cases
  • Wrongful termination lawsuits
  • Discrimination or harassment claims
  • Violation of fair labor standards
  • Failure to accommodate disabilities
  • Inadequate employee file documentation
  • Claims of unsafe or unhealthy working conditions

Based on typical premium rates for the custom architectural woodwork and millwork manufacturing industry (NAICS 337212), the estimated average annual pricing for employment practices liability insurance would be between $2,500 to $5,000. Premiums are usually calculated based on payroll and number of employees. With an average of 20 employees and annual payroll of $1,000,000, the estimated price would be around $3,500.

Estimated Pricing: $3,500

Cyber Liability Insurance

An overview of key aspects to consider regarding cyber liability insurance for custom architectural woodwork and millwork manufacturing businesses: This type of insurance provides important coverage for responding to data breaches and system outages, which are growing risks for any company handling sensitive customer information. It also outlines the top benefits of this insurance like covering legal costs, notification expenses, lost revenue from downtime, and PR/crisis management. Common use cases that would be covered include ransomware, third party liability, and government fines. On average, the estimated annual premium cost for this industry is around $2,500 based on typical revenue levels and insurance rates.

Category List
Benefits
  • Covers legal fees and settlements related to privacy breaches and data loss
  • Covers costs of notifying customers of breaches and providing credit monitoring
  • Covers business interruption costs like lost revenue if systems go down due to an attack
  • Covers PR and crisis management expenses to remedy damage to brand or reputation
  • Covers the costs of forensic investigations, security upgrades, and credit monitoring in the event of a breach
  • Provides liability protection if a third party files a suit claiming negligence led to a data breach
  • Covers theft or loss of customer information such as designs and product specifications
  • Covers fines and penalties from government regulatory agencies related to a data breach
Use Cases
  • Data breach or cyber attack leading to loss of customer or employee data
  • Ransomware attack or malware infection leading to system downtime and ransom demands
  • Third party liability if customer data is compromised due to supplier or vendor security incident
  • Government fines and investigations related to a data breach
  • Costs related to credit monitoring, legal support, PR services after a breach
  • Loss of business or profits from an outage or interruption caused by a cyber incident

Based on typical pricing for cyber liability insurance for businesses in manufacturing industries, the estimated average annual premium would be around $2,500. This was calculated based on average revenue for businesses in this NAICS code of around $5 million and typical premium rates of $0.50 per $1,000 of revenue.

Estimated Pricing: $2,500

Conclusion

Implementing a comprehensive insurance strategy tailored to your unique business model can help provide peace of mind and allow you to focus on running operations smoothly without unexpected disruptions from uncovered losses. Maintaining the right coverage amounts and consulting with an experienced agent ensure your risks are understood and protected appropriately.

Frequently Asked Questions

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