Why Do You Need Insurance as a Self-Employed Carpenter?

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Being self-employed can be one of the greatest feelings in the world, especially because you get to pick and choose the jobs you do and don’t have anyone above you to tell you how to do it. Working your own hours and being responsible for just yourself can have huge rewards. Unfortunately, all of this freedom and responsibility of a carpentry business can have some major drawbacks when it comes to risk. Every single thing that could go wrong will ultimately be your fault, regardless of whether it was intended or not. If you don’t have Carpentry Contractors insurance to provide protection against these unforeseen circumstances, it could end up shutting down your business and causing you to become bankrupt due to the financial impact.

What are the Different Types of Self-Employed Carpenters?

Regardless of the type of self-employed carpenter you fall under, insurance is essential. However, the types of insurance you need may differ slightly. There are two main types of self-employed carpenters that we explain below so that you can determine which you are, and ultimately which insurance policies will be most beneficial to you.

  • Sole Proprietor - If you are a sole proprietor that means you do not have any employees. The good thing about this is you are only responsible for yourself and only have to insure yourself. If you consider yourself s subcontractor, this would fall under the same category. It is possible, though, that certain contracts you sign for work will require the same types of insurance as a big company. Work with your agent to determine what those requirements are and how you can meet them.
  • Company - This could be an LLC, corporation, or even a partnership. If you have employees, your risk for claims is a bit higher and you will probably be required to have more insurance. Not only do you have to insure yourself and your company, but your employees as well.

What Types of Insurance Do You Need?

As a self-employed carpenter, you need to have the right insurance in place. This is the case regardless of whether you are a sole proprietor or a company. Keep in mind that the list below is not inclusive and you should always work with a professional insurance agent or broker to discuss your unique situation and needs.

  • General Liability - This is the very basic and first policy that every agent will recommend that you have. General Liability insurance will provide coverage against claims where someone may have been injured, or property was damaged, as a result of your work. Something as crazy as a ladder falling on a car, or you dropping a hammer on someone’s head, can cause a major lawsuit even if you never meant to hurt anyone or anything.

  • Professional Liability - Professional Liability insurance is especially important if you are giving any advice or providing consultant work. If your advice is perceived to cause financial hardship on a client, or something as simple as a delay of the project, the client may sue you. Even if you did nothing wrong, the policy will provide defense coverage, which sometimes can cost even more than the lawsuit itself with lawyer fees and court costs.

  • Commercial Auto - You will need to cover your work vehicles under Commercial Auto insurance. Most Personal Auto insurance policies exclude business operations even if you are only driving to and from the job site. Commercial Auto insurance will cover liability for others and physical damage to your vehicle.

  • Inland Marine - As a professional tradesman you probably have lots of tools and equipment. Provide coverage for these under Inland Marine, or Equipment Floater insurance. Tools are expensive and if they are stolen, do you really want to have to pay out of pocket?

  • Workers Compensation - If you have employees you should have Workers Compensation insurance, and your state most likely requires it. Providing coverage for employees should they become hurt on the job is essential for employee morale, and your company's finances. Additionally, Employers’ Liability is covered here.

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What are Additional Insurance Types to Consider?

While the above insurance policies are super important to have, there are some others to consider. If you have an office building you want to carry Commercial Property insurance. An easy way to get this coverage affordably is by purchasing a bundles Businessowners Policy that also provides General Liability insurance. Some other important insurance policies to consider are Commercial Umbrella Liability, Cyber Liability, and Employment Practices Liability.

Business Insurance

Running a business is challenging enough without having to worry about lawsuits, employee injuries or property damage. Having the right insurance gives you the peace of mind to focus on what matters - running your business.

The coverage you need depends on the type of business you run. A restaurant owner needs to be covered against customers possibly getting food poisoning while an accountant needs to be covered against calculation errors. CoverWallet's intelligent assessment system will identify the insurance you need based on your specific business, get you a policy that fits your budget, and do it all in less time than you think.

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