With over $35 billion in revenues in the year 2019, the lumber industry is a big industry where one can create a very successful business.
The lumber industry may be a great industry to start a business in. There are certain types of insurance that you’ll need before you can get your business and lumberyard up and running.
Thankfully, you’ve come to the right place to learn more about the essential types of insurance that you’ll need to get started.
Continue reading to learn everything you need to know about commercial insurance.
What Is Commercial Insurance for Logging?
To put it bluntly, there are hazards and dangers that come with working in the lumber and wood industry. Because of that, there are types of insurance that are essential and even required for logging companies and contractors.
These insurances are designed to fit the needs of the individuals who are being covered. There are also types of commercial business insurance that cover the business as a whole from general liability.
The Five Essential Insurance Types for the Lumber Industry
There are five types of insurance that your lumber business should not go without. They will keep you covered for general liability and equipment breakdowns. They’ll also cover injuries to your valued employees.
General Liability Insurance
General liability insurance is a common type of insurance across all types of business. It will keep you covered for all types of things that can befall your business and employees. Here is a look at some of what general liability insurance covers:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
General liability insurance is not a legal requirement. It is extremely risky to operate your business without this insurance program. If something goes wrong and you face a lawsuit, you could be out hundreds of thousands or even millions of dollars.
Those lawsuit expenses can be a disaster for the long-term and short-term outlook of your company. Paying for general liability insurance is a small price to pay to ensure that you’re covered no matter what happens.
Most lumberyards spend only $500 to $1500 per month in insurance payments for up to $1 million in coverage. The monthly payments depend on the location of the yard, your deductible, and how many employees you have.
Other determining factors are your per-occurrence limit and the general aggregate limit. As a way to get general liability insurance cheaper, you can always get it through a business owner’s policy.
Commercial Property Insurance
Commercial property insurance is a great choice if you’ve made large investments into equipment for your lumberyard. This is true for any inventory that you purchased.
Assuming that the building you’re working out of is owned by you, you are responsible for anything that happens there. This includes things like fires and even burglaries. It also includes natural disasters like tornadoes and hurricanes.
Commercial property insurance has the benefit of covering the cost of repairing or replacing the inventory that you carry. It will also cover whatever the expenses are to fix your building and property so that your business recovers quickly.
This type of insurance is also usually available through a business owner’s policy.
Workers’ Compensation Insurance
Unlike general liability insurance, most states require that your business has workers’ compensation insurance for both part-time and full-time employees.
This type of insurance is great because it protects your employees in the case that they become injured while working or face serious illness from a work-related incident.
In an industry as dangerous as the lumber industry, workmans’ compensation insurance is an absolute necessity. It will show your employees that their livelihood and well-being mean a lot to you and it will make sure they’re taken care of if an accident befalls them.
If your employees do get injured or fall ill from a work-related incident, workmans’ compensation will cover their medical bills as well as their lost wages during their recovery time.
It will also assist them financially in the case of disability benefits or even death benefits that result from the workplace incident.
Product Liability Insurance
Lumber is used for a wide variety of things, and your customers expect the best from your products. Unfortunately, accidents happen. If a customer purchases lumber from you and sustains an injury that they believe is your fault you could face a lawsuit.
If that were to happen, product liability insurance is there to protect you and your business. It works by covering your business’s legal fees as well as any damages that are awarded in a settlement with the victim.
Product liability insurance companies are great to work with. They tailor their policies and coverage to suit exactly what your business does and the products that it provides.
Logging Equipment Insurance
The lumber industry is a heavy-duty industry that uses large and expensive equipment. Trees are large and heavy enough to cause damage to your equipment if something goes wrong.
Not having the equipment you need will hurt your business’s revenue. It’ll also cost you thousands on repairs and replacement parts.
That’s where logging equipment insurance comes into the picture. This type of insurance works by providing physical damage coverage for your equipment. It’s especially important for the equipment you use in day-to-day operations.
You can customize the coverage that you get based on the equipment that you use. If you want the coverage to focus on small pieces of machinery that you use around your lumberyard then that is an option.
You can also use it to cover your largest pieces of equipment, even if that equipment costs as much as six figures. Logging equipment insurance will keep your equipment covered. It’ll help your business continues growing and thriving.
Start Your Lumber Company Today
If you’ve found that perfect stand of timber and have a lumberyard that you want to put to good use, you’re ready to get started in the lumber industry. Having the proper types of insurance will ensure that your business is a success.
It will also ensure that your employees are looked after and that your equipment is covered should it sustain any damage. You’ll also be covered should your lumberyard experience damage from fires or natural disasters.
If you enjoyed this article about lumber insurance, be sure to explore more of our business articles!