Sawmill Insurance
Written by
Ann Herro has been writing about insurance and employee benefits for over 15 years. She has covered topics as easy as insuring a car, and as difficult as transparency in healthcare costs.
Reviewed by
Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.
Sawmills and wood product manufacturers have existed for centuries. They typically process raw timber into lumber for shipping and sales. Unlike early sawmills, the sawmills of today are usually high-tech operations that use complex machines and automated systems to prepare logs for transport.
But modern automation has not taken the danger out of working in a sawmill. Employees and any other people on the premises are in danger from heavy cutting equipment, conveyor belts, falling logs, and other perils.
And even if you operate a small-scale, portable sawmill, you can still be hampered by events that damage your equipment, jobsite injuries, and business interruptions.
Tailored sawmill insurance can help you protect your livelihood from the property damage and liability risks that you face.
Why Do I Need Sawmill Insurance?
Businesses that work with lumber and wood in various forms come in all shapes and sizes, from loggers to sawmills, furniture manufacturers, lumber yards, and building material manufacturers. But they all have one thing in common—significant risks that must be addressed with business insurance.
Whether you operate a highly automated, modern sawmill or a portable sawmill that cuts and prepares timber in numerous locations, your environment is filled with highly flammable raw materials and finished products, dangerous machinery with electrical components, and a variety of other dangers that can impact your ability to operate.
Unfortunately, many sawmills are considered difficult to insure because of the high degree of risk involved. Many insurance companies and agents lack the expertise to work with sawmill insurance.
You need an independent insurance agent who is familiar with your business and the insurance companies that offer the specialized coverage you need.
Liability Insurance Protects Your Sawmill from Lawsuits
Liability insurance is designed to protect businesses when they cause injuries or property damage. A sawmill might need several customized liability insurance policies that address a variety of unique risks.
- Commercial general liability (CGL) insurance: Protects you from the costs of lawsuits and liability claims filed by customers, contractors, delivery persons, or any other member of the general public who is injured or experiences property damage while on your premises. Your CGL policy pays for your legal defense, court costs, and court-ordered settlements or judgments.
- Product liability insurance : Covers lawsuits related to defective products. You can be sued if your wood product is defective and injures a user, buyer, or bystander. While some product liability coverage may be included in your CGL policy, talk to your agent about your need for additional, more customized coverage.
- Commercial auto insurance: This is necessary if your business owns and operates any vehicles. It covers your fleet—including logging trucks—and drivers in the event of an accident or other vehicle damage that occurs as you transport logs or other wood products. It covers property damage and bodily injury liability claims, vehicle damage, medical bills, and any legal costs related to an accident involving one of your vehicles.
- Commercial umbrella insurance, or excess liability coverage: Provides liability protection above and beyond the liability coverage include in a CGL policy and commercial auto policy. It pays when your other applicable liability coverage limits have been exhausted for a covered claim.
- Pollution liability insurance: Covers the costs of liability claims stemming from damage caused by hazardous waste.
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Property Insurance Helps You Recover After A Disaster
Sawmills and other wood manufacturing businesses need commercial property insurance to protect:
- Buildings
- Office space and equipment
- Land
- Saws
- Mills
- Log splitters
- Tools
- Supplies
- Inventory
- Heavy machinery and equipment
All of your business property can be damaged by fire, theft, weather events (e.g., wind, hail), vandalism, and other unforeseen events. Commercial property insurance helps you recover the costs of lost, stolen, damaged, or destroyed property after a covered loss.
Talk to your agent about the importance of accurate property valuation in making sure you have the right amount of property insurance. As you experience seasonal fluctuations in inventory and production, you can work with your agent to amend your policy as needed. Having too much coverage is unnecessary and costly, and having too little coverage when something goes wrong can leave you financially devastated.
It’s also important to talk with your agent about how depreciation affects the value of your tools and equipment, and how much you will be reimbursed after a loss. Your agent can explain the difference between cash value coverage and replacement cost coverage. Each has an impact on insurance premiums, as well as the amount that you would be reimbursed after a loss.
Your agent can get quotes for a variety of other property insurance policies that you may need, including:
- Business interruption coverage: Pays for normal expenses, relocation costs, and lost income if your business or equipment is damaged or destroyed and you are temporarily unable to operate.
- Inland marine insurance: Provides coverage for goods and equipment that are in transit. Commercial property insurance will not protect the tools and equipment of a portable sawmill while it moves from job site to job site. Sawmills can purchase inland marine coverage that protects the entire mobile operation.
- Equipment breakdown coverage: Helps you repair or replace damaged machinery that is essential to keeping your production line working. This is invaluable protection for broken or damaged cutting equipment, conveyor belts, and other equipment that you need every day.
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Protect Your Sawmill Employees with Workers’ Compensation Insurance
Workers’ compensation insurance protects your business and your employees from the costs of workplace injuries and illnesses. Sawmill employees are susceptible to any number of devastating injuries, from severed limbs and back injuries, to eye injuries, and more.
With workers’ compensation insurance, your employees receive protection from medical costs and lost income if they are injured on the job. Workers’ compensation may even pay for funeral expenses if there is a fatality at your job site.
Most states require almost every business with employees to have workers’ compensation insurance. Talk with your independent agent about the requirements in your state.
Safety and Loss Control Measures Are Your Greatest Protection
Fire is the greatest threat to any type of business that works with lumber or wood products. One of the most important ways to minimize your fire risk is by putting in place a variety of loss control and safety programs that help you prevent fires and other dangers on your premises.
Sawmill operators often take measures like arranging facilities in ways that minimize the chance of fires spreading to involve the entire facility. Careful inventory arrangement and storage play significant roles in protecting your business from a fully involved blaze.
How Much Does Sawmill Insurance Cost?
The size of your business and the types of policies you need to cover your unique risks determine the cost of your sawmill insurance. Your insurance costs will be based on a variety of variables, such as:
- Number of employees
- Types and value of equipment
- Size and location of your building
- Whether you are a large-scale, fully automated sawmill or a small, mobile operation
- Number and type of trucks or other vehicles that you own
Save on Business Insurance
Our independent agents shop around to find you the best coverage.
Find and Compare Quotes
An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Agent
Sawmills are considered to be risky and business insurance can be hard to find. Some insurance companies have special lumber divisions that specialize in coverage tailored to sawmills and other wood product businesses.
An independent agent isn’t tied down to one insurance company, and can help find insurance companies and products that cater to your needs.
Your independent agent will walk you through some handpicked policy options and explain the details.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.