Carpenter Insurance: The Five Policies You Need for Your Business


Carpentry is one of the most common trades in America. In fact, as of 2023, data shows that 349,517 people were employed in the industry in the U.S.—a 1.6% increase since 2018. 

The demand for professionals in this field is predicted to continue growing over the next few years. Coupled with the fact that carpenters rank #6 in the best construction jobs (based on salary, job market, future growth, stress, and work/life balance), it’s no wonder so many professionals are flocking to this industry.

However, alongside its many benefits, a career as a small-business carpenter comes with its challenges. Carpenters are often extremely busy, with countless tasks and responsibilities to manage daily. Whether you’re a general contractor or specialize in a craft such as finishing or cabinetry, all carpentry small-business duties include bidding on jobs, sourcing materials, and meeting project deadlines. 

With tasks like this on the agenda, more administrative tasks—like managing your insurance— can take a backseat to more pressing projects. Yet having the proper insurance coverage is one of the most crucial aspects of managing a carpentry business. After working closely with construction companies for the past 140+ years, the insurance experts at Central have developed a deep understanding of exactly what policies will be most effective for carpenters—and why. 

Read on to learn about the essential insurance policies every carpenter needs and discover why working with an experienced carpentry insurance provider is the best way to protect your assets and livelihood.

What Insurance Should a Carpenter Have?

The proper insurance coverage can alleviate some of the stress of owning a carpentry business. Below, Central Commercial Lines Staff Underwriter Thomas McMillan outlines the five most important policies every carpenter should have.

1. General Liability Coverage

Suppose someone brings a lawsuit against your carpentry business. In that case, General Liability Insurance can protect your business from someone claiming you caused property damage or bodily harm. What’s more, General Liability (GL) insurance covers for your defense costs and attorney fees arising from such claims.

“There are several key enhancements that can be added to your General Liability coverage that specifically meet the exposure needs and requirements of carpenters,” McMillan says. “Pollution Liability, for example, covers pollution-related claims against your organization. If a carpenter is doing a renovation and disturbs existing pollutants (such as mold, fungi, or bacteria) on a job site, this enhancement will help manage that pollution event.”

Pollution liability is just one of the many endorsements that carpenters might consider adding to their General Liability coverage. For instance, McMillan explains that “Employment Practices Liability insurance has become a needed coverage for all types of commercial entities, including carpenters.  Protection from employees’ claims alleging discrimination, wrongful termination or harassment is critical in ensuring long-term solvency for our insureds.”

2. Commercial Auto Insurance

“Commercial auto insurance protects the insured’s physical property and provides coverage from third-party auto liability claims while transporting employees and materials to and from job sites,” McMillian says. “For carpenters, we can insure any size fleet,  from one car to a large fleet of trucks.  In addition, we can also provide up to a $5 million excess policy that provides additional limits for auto liability claims.”

Most commercial automobile insurance policies provide two types of coverage: property insurance for damage to your vehicle and liability insurance for bodily injury to others and damage to their property. Insurance policies can be expanded to include additional protection for medical payments, uninsured motorists, and personal injury protection.

3. Contractor Tools and Equipment Insurance

Contractor Tools and Equipment insurance is a form of Inland Marine insurance that covers property as it “floats”—or is in transit—between locations. Perfect for carpenters on the move, this policy covers repairing or replacing your tools and equipment in the event they are lost, damaged, or stolen. 

Where commercial property protects a building you own and the contents inside at the location listed on the policy, Contractor Tools and Equipment insurance protects your movable items outside your place of business. This is why it’s important to ensure you have coverage for both.

Did You Know?  Along with stone, wood is among the oldest building materials. Archaeological evidence of carpentry, in the form of water well casings, dates back to 5256 B.C.

4. Commercial Property Coverage

“Commercial Property coverage is applicable for leased, owned, and occupied premises,” McMillan says. “Central can provide coverage for an insured’s personal property at a leased location or provide Personal Property and Business Income insurance for our carpenters’ workshops and other owned locations.”

Commercial Property insurance protects you from property and income losses resulting from a covered cause of loss, such as fire, lightning, explosion, wind, and hail. However, a more popular option is to insure commercial property for all covered causes of loss except those specifically excluded in the policy. Your independent Central agent can work with you to determine the best plan for your business.

5. Professional Liability Insurance

“Often, carpenters will be required to carry Professional Liability insurance, especially for contractual obligations when working with general contractors,” McMillian states. “Contractor’s Errors and Omissions is an important coverage to consider to protect the insured from claims related to business mistakes or other negligence that might be excluded under an unendorsed General Liability policy.”

Most Professional Liability insurance includes protection if a customer sues because of a mistake made in the business’ course of work. Coverage also includes defense costs for covered losses in the event of a lawsuit. Without this insurance coverage, you may have to pay for these damages out-of-pocket.McMillan further explains that Central also offers contractual Errors and Omissions (E&O) insurance on a sub-limit, which protects from professional or consulting mistakes they may make on a project, like using the wrong kind of wood or materials.

Learn more: Central’s Business Owner’s Policy: What It Is & How It Can Help Small Businesses Save Time & Money

Work With an Experienced Provider for Carpenter Insurance Needs

At Central, our sole purpose is to ensure your carpenter insurance coverage is in the best interest of your business. Combining this commitment with our more than 140 years of experience and specialized construction expertise, choosing to work with Central is a win-win for carpenters. 

“Especially for small-to-midsize artisan interior carpenters who work inside a building, Central has a robust product offering and the expertise you need to purchase appropriate limits to protect your business,” McMillan says. “On top of that, Central’s customer service, claims, and loss control departments are wonderful and responsive. We pride ourselves on excellence, integrity, and a passion for service.”

Keep in Mind: Working with a local independent Central agent is your best line of defense to protect against legal and financial repercussions, as insurance regulations can vary by state.

Trust the Central Difference

At Central, we differentiate through broad product offerings and strong relationships. Our vertical team is focused on construction and dedicated to adding value to our partnerships. Looking for an independent Central agent? Click here to locate one in your area.

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