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Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a lumber yard.
Lumber Yard
This article will discuss the primary insurance coverage for lumber yards, general liability insurance, as well as additional policies that are appropriate for this industry.
Lumber Yard General Liability Insurance
Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.
General liability insurance covers the following risks:
Physical harm
Damage to property
Medical expenses
Legal defence and decision
Personal and commercial harm
While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.
Example 1: A prospective client falls over a piece of timber while visiting your lumber yard and fractures his wrist. If they chose to suit, general liability insurance would cover their medical expenses as well as your legal fees.
Example 2: Your driver accidently damages a customer’s window with a piece of plywood during a delivery. The expense of replacing the customer’s window would be covered by general liability insurance.
Example 3: As you meet with a client on-site, an employee nearby is cutting wood. A flying piece of wood grazes the customer’s eye, necessitating months of medical visits and therapy. General liability insurance would cover the customer’s medical expenditures as well as your legal fees in the event of a lawsuit.
Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.
General Liability Insurance Cost
In America, lumber yards typically pay between $500 and $1,500 per year for $1 million in general liability insurance.
The cost of your coverage will be determined by a number of variables. Among them are your:
Employees’ number
Per-occurrence restriction
The overall aggregate limit
You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.
Other Types of Coverage Required by Lumber Yards
While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that all lumber yards should have are as follows:
Insurance for Commercial Property
You’ve made significant investments in inventory and company equipment. If you own the building where you do business, you are liable for any business-related property that is held there in the case of a fire, burglary, or natural catastrophe. After an accident, commercial property insurance would cover the expense of repairing or replacing your inventory and damaged company property, allowing you to recover fast.
Commercial property insurance is often available as part of a company owner’s policy (BOP).
Insurance for Workers’ Compensation
Workers’ compensation insurance is required in most states for both part-time and full-time employees. This coverage covers your workers if they are hurt at work or get sick as a result of a workplace accident. It covers not just an employee’s medical expenditures and missed pay if they need time off to recuperate, but also any disability or death benefits resulting from a work-related accident.
Workers’ compensation insurance is often available as a stand-alone policy.
Coverage Options Available to Lumber Yards
In addition to the policies listed above, your lumber yard may need other forms of coverage based on particular features of your business. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.
Insurance for Product Liability
Your clients utilise your timber for a range of projects and expect nothing less than the best quality every time. If a consumer feels one of your items has damaged them and sues, for example, if a piece of lumber breaks, product liability insurance will pay your legal bills as well as any damages awarded in a settlement.
Product liability plans and premiums are tailored to the details of your company and the items you sell.
Additional Security Measures for Your Company
Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.
With this in mind, here are a few steps you can take to better secure your company:
Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)
To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)
Keep your company licences up to date.
Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.
If your company is an LLC, you should check into LLC insurance.