Commercial Insurance Cost for Cabinet Shop
When you open a manufacturing facility, commercial insurance is required. The terms of my first cabinet shop lease set the requirement at a $100,000 minimum coverage policy amount for liability. I had my lawyer review the lease, he said it was standard verbiage. The annual cost was $600 for a $500,000 blanket protection agreement. Auto, truck and storage trailer coverage was needed as well.
My provider allowed me to set up a payment plan which required a 30% deposit and the balance was then paid in semi annual installments. Once the agreement was signed, I was sent an excessively large book with all of the claims, accidents, hospitalization coverage and liability information assembled inside. I threw it in a drawer and prayed I’d never need to ever read it.
Prior to opening the Florida based cabinet company; I had factored the amount into a business plan. The quotes I received were from companies that friends had recommended. I eventually choose a company in Sarasota Fl., Russ Jordan Ins.
Now sixteen years later I can proudly say that I’ve only had one minor incident that required me to draw from my policy. It was a totally stupid mistake on my part. Thank God it wasn’t an accident injury claim. Although the accident was work related, no one got hurt.
I Broke a Range Appliance
I had been hired by a kitchen flood damage restoration company to remove water soaked cabinets and restore the kitchen back to its original state. The company I was working for acted as a “go between” for the victims and the Insurance claims company. I think they called themselves insurance contractors.
In any case I grabbed the range by the handle and also from the backside and was pulling it out and the entire front panel of glass shattered into thousands of tiny pieces. There was no metal frame around the ranges handle. It was directly inserted through holes in the glass. It was the pressure of when I lifted up that caused the glass to pop and crumble to the floor.
My commercial policy covered the damage of replacing the broken range with a minimum amount due from me of $70 dollars.
Important: One thing I discovered was that there were varying rates for different job descriptions in relation to percentages of time worked in various places. For instance, if most of the work was performed in the cabinet shop, insurance costs were higher than if the majority of labor was at the customer’s home.
In sixteen years, I only had one large commercial account that I did a lot of cabinetry work for. It was a large hospital in Florida and they required that my policy have one million dollars of liability coverage.
There are many local and state insurance requirements for cabinet companies. By obtaining a commercial policy, in the beginning when starting your business, this will cover you for all types of industry related accidents that may occur. Take time to assemble several quotes from various providers and try to find a company that is in the city where your business is located. It would have been frustrating for me to deal with an adjuster in New York, when my broken appliance claim was in Florida.
Having commercial liability and auto insurance for your cabinet business is going to be a must. Do not try to get by without it. Always have a lawyer review binding lease agreements and any claims that may occur prior to signing anything.