Woodworker's Insurance, who do you recommend?

[Dugarry]

Good morning,

I've recently been looking into business insurance and I've found it a surprising pitfall of spiraling costs and bizarre exclusions.

As a new sole-trading woodworker, I'm keen to not restrict myself in what jobs I take, therefore, if it involves wood, I'm interested. I have found that insurers, even if they have a specific "furniture maker" insurance, then consider on-site fitting requiring additional bolt on fees, but then that on-site add on, doesn't count if I want to fit a kitchen, that's something else. I can upcycle furniture, but I can't restore furniture. Very frustrating.

So, I ask the community, who do like to use for your business insurance?

A few details for me, I'm a sole-trader, I work solo, I have a workshop in my single garage and I'd like to take on most woodworking projects, making and fitting, but I will limit myself to residential jobs.

 

[baldkev]

Hi,
Its complicated
I have public liability, tool insurance with a few add ons with direct line. I bought a digger late last year and decided to investigate the insurance options and i found i am probably under insured.... but directline arent necessarily the best provider.
I did an online quote through a trade insurance company and they can cover tools, liability and 'project cover' up to whatever limits you set. Mine came out at 500ish quid, compared to £220ish with direct line, but it covers way more and with a lot less clauses..... so i know what im doing come renewal time.
I have considered doing it sooner, but was told I'd have to cancel the d.l insurance and pay the rest of the years premium to cancel, before starting a new policy elsewhere.

 

[Doug71]

I'm a sole trader and have used AXA for a few years, never made a claim so don't know if they are any good or not.

Workshop in the garage, not sure what the insurers will think of that...........

 

[ajs]

I'm a sole trader and have used AXA for a few years, never made a claim so don't know if they are any good or not.

Workshop in the garage, not sure what the insurers will think of that...........

I'm just popping this in here as a reminder to myself to come back to this in the morning.

 

[baldkev]

With my 'workshop' it's hard to get cover, so one broker told me to insure the kit within, but accept no insurance for the shipping container itself

 

[D.Stephenson]

Try Aviva, been with them for years, no one else can get anywhere close to matching their price. Had to claim once when the workshop was broken into and they were pretty easy to deal with.

 

[ajs]

I'd take a look at options under general home insurance. Is your garage workshop attached to the home or detached? If detached it counts as outbuildings and limits are often lower, but depending on the policy you may be able to increase limits for an additional premium. The other thing to check immediately is coverage for trade tools - some policies cover them, others don't. Similarly check for cover away from the home and tools in transit cover. The nice thing about home insurance is that it often has fairly broad, nonspecific coverage provided the headline cover is there. That and being a consumer product you're covered by the Financial Services Ombudsman who generally set a high standard for companies, and will throw out excessively technical exclusions.

Of course that only covers your tools and potentially stock for material loses. Public liability will need to be provided separately.

 

[Blackswanwood]

I'd take a look at options under general home insurance. Is your garage workshop attached to the home or detached? If detached it counts as outbuildings and limits are often lower, but depending on the policy you may be able to increase limits for an additional premium. The other thing to check immediately is coverage for trade tools - some policies cover them, others don't. Similarly check for cover away from the home and tools in transit cover. The nice thing about home insurance is that it often has fairly broad, nonspecific coverage provided the headline cover is there. That and being a consumer product you're covered by the Financial Services Ombudsman who generally set a high standard for companies, and will throw out excessively technical exclusions.

Of course that only covers your tools and potentially stock for material loses. Public liability will need to be provided separately.

By all means check this but a home insurance policy will typically have a specific exclusion for items used for a business or profession other than home office equipment.

 

[ajs]

By all means check this but a home insurance policy will typically have a specific exclusion for items used for a business or profession other than home office equipment.

It does vary. I used to work as an insurance claims handler, some policies exclude trade kit entirely which can be potentially problematic even for hobbyists as some stuff will be excluded on sight - Snap-On was the common case.

Cover does vary though, you can't make general rules. One underwriter I was very familiar with was Lloyds Banking Group (not Lloyds of London). Their own branded policies included exclusions on trade kit but many policies they underwrote for others had no such restrictions. Hastings Direct comes to mind.

As always it pays to speak with a proper broker, not simply buy the cheapest from a Meerkat or whatever. Insurance is a complex product and generally poorly understood by the buyer.

 

[Jacob]

I've never bothered. Saved loadsa money! Woodwork is not a particularly risky business. I've never heard of a woodworker being sued for anything. If theft is your worry spend more on anti theft measures - much cheaper than insurance.
If really worried maybe look at becoming a limited liability company? Has other advantages besides limiting liability.

 

[mudman]

I've never bothered. Saved loadsa money! Woodwork is not a particularly risky business. I've never heard of a woodworker being sued for anything. If theft is your worry spend more on anti theft measures - much cheaper than insurance.
If really worried maybe look at becoming a limited liability company? Has other advantages besides limiting liability.

Just because you've never heard of it, doesn't mean it hasn't happened. Is it something you scan the news for on a regular basis?
Insurance is always a good idea, as a business owner, there are many things that you can be sued for. Public liability if your actions result in injury or damage and Professional Indemnity to cover legal costs. Then if employing anyone, employers’ liability insurance becomes a requirement. These aren't all that expensive and the savings in the event of a claim can be enormous. Without them, you risk losing your livelihood and everything you've worked for. It's also worth remembering that personal injury claims can be made up to 3 years after the event, or up to 3 years after the claimant turns 18 if a minor at the time so you should also consider continuing the insurance after closing a business down.
Implying that insurance isn't worthwhile for a business is a very unhelpful thing to say. I may say it about pet insurance but not where someone's business, livelihood and home are concerned.

It should also be remembered that operating as a limited company will not necessarily absolve you of all liability. If there is a case for a claim for work carried out by you, then the company can be sued but if there are no assets in the company than the plaintiff can come after you personally, which the HMRC can also do if you fail to pay your tax. There are also other obligations and pitfalls involved with a limited company, some of which you can be personally liable for. For example, if you or your accountant neglect to file your returns, it's you who's liable for the fine which can be up to £5000 and again, if you owe any tax and you have equity in your house, the taxman can sell it from under you.

 

[Jacob]

Just because you've never heard of it, doesn't mean it hasn't happened. Is it something you scan the news for on a regular basis?

Has it happened then? I don't know, do you?

Did have household insurance 50 or so years ago and bike leaning against the house by the front door got pinched. They wouldn't pay up as it wasn't inside the property boundary when it was nicked. Arguable - a few inches of it certainly were!
Didn't renew. Haven't renewed since. Probably saved many thousands. Have spent a bit on smoke alarms, fire extinguishers, locks, etc

 

[mudman]

Has it happened then? I don't know, do you?

Did have household insurance 50 or so years ago and bike leaning against the house by the front door got pinched. They wouldn't pay up as it wasn't inside the property boundary when it was nicked. Arguable - a few inches of it certainly were!
Didn't renew. Haven't renewed since. Probably saved many thousands. Have spent a bit on smoke alarms, fire extinguishers, locks, etc

Well here's one example. I suspect there will be many more but won't often reference woodwork in the case title so finding them might be difficult.

I have household insurance. Doesn't cost much. One day some scroats decided they would pinch our 100 year old wrought iron gate. The insurance paid out for a new hand made one from a local blacksmith. Cost a small fortune that I wouldn't have been able to afford at the time so well worth it. But then, introducing comments about household insurance is a specious argument that has nothing to do with business insurance and is one of your typical diversionary tactics. You get your bike nicked, you lose a few hundred quid buying a new one and feel a bit stupid for not taking it inside. You injure someone due to a bit of carelessness and you can lose the whole house.

 

[peter-harrison]

I'm a sole trader and have used AXA for a few years, never made a claim so don't know if they are any good or not.

Workshop in the garage, not sure what the insurers will think of that...........

I've been with AXA for years too. I've made a claim relating to damage to one of my buildings and they have been great.

 

[Dugarry]

Really appreciated all your replies.

Took a look at AXA and Aviva as they were mentioned, but in the end took ajs's advice and I contacted a broker to talk through all my requirements as baldkev did warn about under-insuring myself and I didn't really fancy that! So, thank you all, I'm all sorted!

 

[baldkev]

Has it happened then? I don't know, do you?

Did have household insurance 50 or so years ago and bike leaning against the house by the front door got pinched. They wouldn't pay up as it wasn't inside the property boundary when it was nicked. Arguable - a few inches of it certainly were!
Didn't renew. Haven't renewed since. Probably saved many thousands. Have spent a bit on smoke alarms, fire extinguishers, locks, etc

I know a lady who bought her bungalow ( no mortgage ) and had a wood burner fitted. A month later the roof went up.... she didnt need insurance either.....
If i could get another 80k together i could buy it, but i fell short

Edit to add, the legal battle with the wood burner company is 4 years in and cost about 80k so far

 

[Ollie78]

Its a nightmare all round I am afraid.

In the end I have a combined policy with workshop and public liability. The only policy I could get that was even remotely appropriate was from Allianz which I found through a broker.
I am a sole trader and rent a building which is " Non standard construction " basically a building inside an old tin barn.
I have had to add many caveats to the policy. I will give one example.
All waste bin/skip/whatever was supposed to be at least 15 metres away from the building, I had to explain that I don`t rent that bit and only have a limited parking area so my skip is about 4 metres away from the building. Every small thing like this needs to be addressed as an exemption to the regular policy and agreed upon. Its daft as my direct neighbour has his skip about 1.5 metres from my door anyway !!

Check the distinction between "fixed machinery" and "portable power tools" these will be valued separately, do not undervalue them.
Also don`t forget stock and materials.

good luck

Ollie

 

[Terry - Somerset]

Statistically insurance is not worth having - even if a claim is met, the premiums paid also need to cover insurance company admin, profit, claims handling etc. In summary - insurers pay out less in claims than the premiums they receive.

BUT - in the event that you are not insured and have a loss, be very clear about the consequences.

A small loss (eg: tools stolen) may cost a few hundred or thousand for replacement. This may be a justifiable risk to take assuming you have the savings to afford replacement.

A large loss (eg: workshop fire, injury or death claim) in the tens to hundred of thousand is a very low probability but ruinous for most should it occur.

Given the relatively low cost of insurance vs the consequences of a large claim, it seems to me to be (at least) imprudent not to get a policy.

 

[COWS]

@Jacob Sorry but it is pretty irresponsible to advise against business insurance. Or any insurance come to that. The op said that they will carry out fitting in peoples home. Entering someones property without insurance 'Should' be a criminal offence, like driving without motor insurance.

Kit inside my workshop is 20k+. I have tools power\hand, machinery, materials and the building covered. Personal accident for loss of anything from finger to limb to life. I have public liability cover should anything I make cause injury to someone.

I've had business insurance for best part of 30 years and it will have cost me many many thousands over those years. I hope I never need to use it.

Is house insurance not a requirement for a mortgaged property? Even if owned outright, I couldn't imagine the personal cost should one loose everything. I even have specialist insurance for personal belongings.

My advice to anyone is don't skimp on insurance. Get yourself properly covered for what you do and have.

 

[Jacob]

@Jacob Sorry but it is pretty irresponsible to advise against business insurance.

I'm not advising anybody I'm just saying what I think.
I got doubly pee'd off with insurance when I rented a unit in a new industrial estate. Lots of start ups going on and about 10 insurance agents a day dropping in with some very dodgy deals e.g. insuring against "hospitalisation" and ignoring that even if you had a leg amputated you'd probably be out of hospital in a few days but out of work (not covered) for a long time. It turned out that I was the only person in the estate who wasn't gulled into it!