According to the U.S. Bureau of Labor Statistics, there were over one million carpentry jobs available in 2019 and that is not expected to decrease in the near future. Many skilled carpenters choose to graduate from an employee into an independent contractor, and later become a full business owner with employees.
Whether you are just beginning your independent career or you’re ready to grow your small business, you need carpenter’s insurance. Here are five reasons you need general liability insurance specifically:
1. You are a solo operator
If you are like most independent carpenters, you have bootstrapped your way into the business. You operate on thin margins with little room for error, and cash flow can sometimes be spotty. Even if you’re past that point and on solid ground with billable hours and timely invoice payments, you are not likely in the position to weather an expensive unexpected event.
What happens if a customer trips over your tools and breaks their ankle? Will you be able to pay for their emergency room visit? There may even be a stay in the hospital and extensive rehabilitation needs. Can you afford to pay for those expenses yourself?
Likewise, how prepared are you to handle an accusation of property damages? Whether you caused damage in the course of your work or not, can you afford to reduce your billable hours so that you can defend yourself in court?
General liability insurance is coverage that helps you if events like these occur. Whether you’re at fault or not, this policy will pay for medical care or property damages. It will also cover your litigation costs, settlements, or judgments if they’re ordered. This coverage helps you continue working and earning an income, while also not having to cover extensive unexpected costs caused by physical injury or property damage claims.
2. You own a mobile carpentry business
Most carpenters are mobile. Their services are conducted on-site at a client’s location. You may be at one location to install kitchen cabinets, another to repair a deck, and still, another to build a barn. Being mobile brings additional risks to your company. Whether you operate as a sole proprietor or you have a team of employees, you travel frequently for work. Being on the road more frequently than average increases the chances that you’ll be involved in a car accident. And even if the accident is not your fault, you could potentially have to pay extensive amounts of money out of pocket if you’re not properly insured.
Your company vehicle is usually worth much more than an average consumer vehicle. When you add the value of the tools, equipment, and materials you may be carrying, the average consumer insurance policy is not likely to be enough to cover the full costs if everything is lost.
Commercial auto insurance protects you from this underinsured risk, and it protects you if the other driver has no insurance at all.
3. You sell retail products
Even carpenters that do not own retail stores may recommend or sell products to their customers. You may recommend a certain type of stain or water sealant, for instance. Occasionally products are recalled for defects or problems. And sometimes a customer simply has an adverse reaction to a product. Whatever the case, general liability insurance protects you from times when problems arise with products or services you’ve provided.
4. You advertise your business
You need to advertise your business to grow and thrive, right? But this carries risks as well. Personal and advertising injury risks are related to claims of copyright infringement, or slander. Whether you use traditional tv, radio, or newspaper advertising or you choose to run a social media campaign on the internet, these risks still exist. General liability insurance will help protect you from these claims if the need arises.
5. You have a store or shop
Once your business grows to the point of needing a physical business location, you’ll need to ensure that the premises are protected. Business premises that are leased or rented are covered from potential damages under a general liability policy. If you cause damages to the property, the owner will not be left to pay for repairs directly. Many landlords will not rent or lease to a business without this protection in place, because it exposes them to too much potential risk.