Learn how wood furniture manufacturers insurance helps sawmill & lumber industry manufacturing businesses protect themselves against the many complex risks they face every day. Whether your business is large or small, or you make one or many products - you need the right commercial insurance program to protect you.
Wood Furniture Manufacturers Insurance
Wood Furniture Manufacturers Insurance. Wood furniture manufacturers produce a variety of furnishings including beds, cabinets, chairs, shelving, sofas, and tables. Furniture may be of solid wood, veneered plywood, or particle board, and includes parts made of metal, cloth, natural fibers (such as wicker and rattan), plastic, and other synthetic materials. The finished product may be pre-assembled, or assembled during installation by the customer or contractor.
Usually, the manufacturer receives wood products in specific lengths and widths. They are seasoned (dried either in kilns or in the yard), cut, planed, sanded, assembled with glue or hardware, stained, varnished, painted, or otherwise finished. Chairs or sofas may be upholstered.
Modern production work will usually employ CNC workstations (computerized machining), but custom work may be done by hand. Custom manufacturers may also install their product. Some furniture makers may also own a retail outlet. Component parts may be manufactured in different locations or different countries.
As a manufacturer of wood furniture, you work with a various supplies, equipment, and machinery. It's also likely that you work with several clients and employee at least a few staff members. You've invested a lot in your business, and while you are very proud of the work that you do, there is always a risk that something can go awry.
Despite your best intentions, accidents can happen, clients can be dissatisfied, and acts of nature can strike. What would you do if you were to be hit by a sudden liability? Would you be able to afford to pay for the damages, medical bills, repairs, or legal fees that could be associated with any of these risks? If not, then it is extremely important that you carry the right type of wood furniture manufacturers insurance coverage.
The Benefits Of Insurance For Wood Furniture Manufacturing
While you strive to provide the highest quality products, provide your employees with proper training, and go to great lengths to ensure that every aspect of your business is running smoothly, unforeseen incidents can arise. A fire could break out, a visitor could slip at your facility, an employee could be injured while working, or a client could file a claim against you stating that you were negligent.
If any of these type of situations arise, you could be looking at serious financial repercussions; and, as the owner of your business, you would be liable for any damages, medical bills, legal fees, and more. Without insurance coverage, you would have to pay for these costs out of your own pocket. Given the fact that the cost of these types of perils is so exorbitant, your business could end up facing bankruptcy and could potentially be shut down.
If, however, you have the right type of wood furniture manufacturers insurance, you can avoid the financial pitfalls that are associated with these liabilities. In other words, insurance helps to protect your business from serious financial devastation. That's because your carrier will help to cover the cost of claims that are filed against your business, which means that you won't be solely responsible for the cost.
What Types Of Wood Furniture Manufacturing Insurance Should You Carry?
As with any other type of business, there are several different types of insurance coverage that wood furniture manufacturers are strongly urged to carry. Some of the most highly recommended wood furniture manufacturers insurance policies for businesses in this industry include:
- Commercial Property: You work with flammable materials, your equipment and building is susceptible to theft, vandalism, and acts of nature. That's why you need to carry commercial property insurance. This type of coverage will help protect you from things like fire, theft, and vandalism. Your carrier will help to cover the cost of repairs, as well as replacements.
- Business Interruption: If your business ends up having to close down as a result of a fire or some other act of nature, you stand to lose a lot of money. With business interruption insurance, your carrier will help to cover the cost of lost earrings that occur when your business is interrupted.
- Workers Compensation: As an employer, it is your responsibility to make sure that your staff is taken care of. If someone is injured on the job or suffers a work-related illness, workers' comp insurance will help to cover medical bills and lost wages. If the employee files a lawsuit against you, this form of insurance will also help to cover legal fees.
- Commercial General Liability: Should a client, vendor, or any other third-party become injured on your property or claim that you or an employee damaged their property, commercial liability insurance would protect you. This type of coverage will help to pay for any damages that you are responsible for, as well as any legal fees and compensation that you may be required to pay.
Wood Furniture Products Manufacturing's Perils And Risks
Property exposures consist of an office, shop, warehouse for raw materials and finished goods, and often a yard for raw materials. Ignition sources include electrical wiring, heating and cooling equipment, overheating of production machinery, and explosions from the build-up of dust due to cutting and sanding operations. The risk increases dramatically in the absence of proper dust collection systems, ventilation, and adequate disposal procedures. Wood is highly combustible and susceptible to damage by fire, smoke, and water.
Glues, paints, varnishes, and stains may be flammable and must be adequately separated and stored away from other operations. Spray-painting operations should be done in spray booths with explosion-proof electrical components. The use of dip tanks instead of spray booths may require special attention. Exotic woods or expensive hardwood products may be attractive to thieves.
Appropriate security controls should be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department. Business income and extra expense exposures can be high if a lengthy amount of time is required to restore operations.
Equipment breakdown exposures include malfunctioning production equipment, ventilation and dust collection systems, electrical control panels and other apparatus. A lengthy breakdown to production machinery could result in severe loss, both direct and under time element.
Crime exposure comes from employee dishonesty and theft if raw wood is expensive or finished items are high in demand. Employees may act alone or in collusion with outsiders in stealing money, raw materials, or finished stock. Background checks should be conducted on all employees. There must be a separation of duties between persons handling deposits and disbursements and handling bank statements. The manufacturer should have security methods in place to prevent theft.
Inland marine exposures include accounts receivable if the manufacturer offers credit, computers (which may include computer-run production equipment), contractors' equipment for forklifts and other heavy machinery, exhibitions, goods in transit, and valuable papers and records for customers' and suppliers' information. The major causes of loss are fire, water damage, theft, collision, and upset. If the manufacturer installs products, an installation floater should be considered.
Premises liability exposures is normally low, as access by visitors is limited. If the manufacturer conducts tours or has a showroom or retail outlet, visitors may be injured by slips, trips, falls, or flying debris. Storage of wood in the open presents an attractive nuisance hazard. The yard should be fenced to prevent unauthorized access, with proper lighting and warnings. Dust, fire or explosion, fumes, and noise may affect neighboring properties. If the manufacturer performs retail delivery or installation, there may be frequent small property damage claims.
Products liability exposure varies based on type of furniture produced. Chairs can collapse, and recliners and beds that open and close can tilt over or trap children or smaller adults inside. Children's furniture, particularly baby cribs, can result in large losses if not manufactured according to current governmental regulations, guidelines, and standards.
Warnings, age-appropriate information regarding potential hazards, and recall procedures are very important. Although household furniture tends to have lighter use than heavy institutional furniture (such as in bars, restaurants, and hotels), more injuries may occur because household furniture is not subject to regular inspection and maintenance. Courts also tend to apply stricter liability standards to consumer goods. As furniture can be used for a long time, older items made before improved safety features were introduced may still be in use.
Environmental impairment exposure is moderate to high due to possible contamination of ground, air, and water from sawdust, chemicals, paints, and varnishes, used in processing and the lubricants and solvents used to service machinery. Storage and disposal procedures must adhere to all EPA and other regulatory standards.
Business auto exposure may be high if the manufacturer transports raw lumber or finished goods. Proper loading and tie-down procedures are essential to prevent overturn and/or release of lumber. Retail delivery to homes represents a serious exposure due to the street presence of children and possible time pressures on the drivers. Manufacturers generally have private passenger fleets used by sales representatives.
There should be written procedures regarding the private use of these vehicles by others. Drivers should have an appropriate license and an acceptable MAR. All vehicles must be well maintained with documentation kept in a central location.
Workers compensation exposures may be significant. Injuries from production machinery are common, as are burns, cuts, slips, trips, falls, foreign objects in the eye due to flying wood chips and dust, hearing impairment from noise, back injuries from lifting, and repetitive motion injuries. There should be safety training and protective equipment. Workstations should be ergonomically designed. The high volume required for production schedules may lead workers to remove guards on the machinery, or to postpone maintenance and repair to increase production.
Exposure to chemicals, dust, glues, binding agents, paints, and varnishes can result in burns and skin, eye and lung irritation. Workers should be aware of the toxic nature of any chemical and should be made fully aware of the need to watch for early signs and symptoms of problems. Drivers of forklifts and vehicles may be injured in accidents.
Wood Furniture Manufacturers Insurance - The Bottom Line
We hope this article on wood furniture manufacturers insurance has been informative. To find out exactly what type of coverage you should carry, how much you should purchase, and how much it will cost you, speak to a reputable insurance broker.
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