Carpenters specialize in cutting, shaping, and installing materials during new construction and renovations for residential and commercial structures. There are many types of carpentry work and they all have potential risks. This article discusses the potential exposures carpenters face and common types of construction insurance.
Potential Exposures
It can be challenging to control risk in the construction industry. The following are some of the most common risks carpenters are exposed to:
- Injury—Injury to employees and third parties is one of the most common risks of carpentry work. Employees can sustain injuries while performing their duties since they often work at heights and may be exposed to falling. There is also risk involved with handling the materials used in carpentry. Third parties can also be injured at the project site.
- Property damage—Damage to a client’s property can occur both during a project and after its completion. For example, framing construction may utilize cranes or lifts, which can cause damage if not properly used.
- Auto accidents—Any business that utilizes vehicles is susceptible to auto accident risks. Accidents could lead to injury or death, and the vehicles involved could also be rendered useless.
Common Types of Construction Insurance
Carpenters should have adequate insurance to manage their risks. The following are coverages carpenters should consider:
- Workers’ compensation—Workers’ compensation covers work-related employee injuries or illnesses. Carpenters—particularly framing carpenters, whose work involves building the frame and sheathing—are especially susceptible to falls while on the job site. Since carpenters use power tools, including saws, lacerations can also occur. While these injuries are infrequent, they can be severe and require extensive medical treatment, resulting in a loss of ability to work. Workers’ compensation is critical coverage, as it takes care of the injured employee in the event of an accident. It will pay medical bills associated with work-related injuries and compensate the employee for lost wages—which can occur if the injury is severe enough for a doctor to recommend taking time off. What’s more, workers’ compensation policies typically come with employer’s liability coverage, which covers employers if a lawsuit is brought against them for their negligence in a workplace injury.
- General liability—Carpenters face exposure from scaffolding on active job sites, power tool use, customers coming into their office or showroom, and work in occupied buildings. General liability insurance covers claims of injury or property damage caused by routine operations such as these. This insurance can also cover damage to a customer’s building caused by a carpenter. Additionally, general liability insurance can provide coverage for reputational harm or advertising injury.
- Completed operations—Completed operations claims occur when injury or property damage results from finished work. Completed operations coverage protects businesses that provide a service and does not apply until after the work is done.
- Commercial auto—Carpenters typically use trucks or vans to get employees, materials, and equipment to a worksite. Commercial auto claims can apply to damage to company vehicles, damage to others’ vehicles, and medical payments. Physical damage covers the damage to company vehicles, and liability covers damage done to other vehicles. Hired and non-owned coverage takes care of rental vehicles and vehicles owned by employees used for business reasons.
- Property—Damage to a company’s physical assets, including owned buildings and the business property, may result in property claims. Even if carpenters work out of their homes or do not own their own building, business assets such as equipment, tools, and computers are still at risk of property damage. Property insurance protects only from the perils covered by the policy. For example, floods are generally not covered events. Additional coverage may be necessary.
- Inland marine/equipment floater—Since commercial property insurance only covers business property at the location listed on the policy, inland marine insurance may be necessary for carpenters, as it is for property stolen or damaged during transit. Since carpenters typically go to job sites with tools and equipment, equipment floater policies can help protect them from risk. Carpenters may also use larger equipment, such as lifts and cranes, that can be protected during transit with inland marine or equipment floater coverage.
- Commercial umbrella—Commercial umbrella insurance provides additional coverage if claims exceed their limits. For example, if the limits of the policy are $1 million while the loss is $2 million, an umbrella policy can make up the difference. Otherwise, costs may have to be paid out of pocket.
- Cyber liability—Increasingly, carpenters depend on technology to carry out their operations. Complex projects often require information and financial exchanges between clients, contractors, suppliers, and other third parties. While technology helps carpenters perform their work, they are at risk of suffering financial losses from cyber events. Cyber liability insurance can help carpenters by providing coverage for first- and third-party cyber claims.
To best mitigate risk, carpenters should explore all policy options to find coverage for their business. For more information, contact us today.
