Cabinet makers come in all shapes and sizes. Some business may design, manufacture and install, whilst others choose to provide mono-line services such as; manufacture or design or install.
With an average expense/turnover ratio of 77-92% (ATO Benchmark), operators are often looking for cost savings and efficiencies. Insurance is a significant cost but a necessary risk mitigation strategy to protect capital investment in machinery and employees.
It is important that each business owner or operator seek advice from a qualified advisor to create a tailored insurance program based on a client’s appetite for risk, financial capacity and risk mitigation strategies.
However, the following general advice will assist in shaping those discussions.
Managing Risk = Managing Costs
The insurance industry generally considers cabinet maker workshops to be a relatively high fire risk by industry standards. As a result, your insurance premiums will be impacted by your “housekeeping” including procedures for dust management/extraction, fire protection, management attitudes and pro-activeness to risk management and flammable controls.
An insurance broker can help you prepare the right information and documentation to present to your insurer.
Prioritise Your Protection
Insurance can be a significant cost for most cabinet makers. It is therefore important that you consider prioritising your insurance spend on a “must-have basis”.
Want our list of “Must Have” Covers? ⬇️⬇️Scroll down ⬇️⬇️ to get our complete Guide to Cabinet Makers Insurance
Subcontractors create additional risk
Subcontracted labour has become a popular employment option in the industry but your public liability policy will generally only cover the Named Insured within the policy and employees. Cabinet Makers need to make sure they have a strategy and policy in place to ensure subcontractors are adequately covered.
Principals also have a duty of care to subcontractors and or labour hire personnel who work under their supervision or control. As a consequence, some public products liability insurers are imposing higher worker to worker excesses or even going as far as excluding personal injury claims to subcontractors or labour hire working under your controls.
Product in transit creates risk
Most cabinet makers will have property insurance policies that cover the work in progress and at completion whilst at the workshop. However, once the cabinetry leaves your premises it is important to consider who is responsible for loss or damage until handover or the final payment is received?
It is important that these issues are considered so decisions can then made on whether insurance is required for these exposures.
It is not uncommon to find certain employees, particularly installers that supply their own tools of trade to perform their work. Often no one thinks about the insurance of employee’s tools when an employer requires an employee to supply his tools to perform work on behalf of the company.
In reality, the tools can be insured by either the employee or the employer depending on the agreement reached between the parties. Either way, this should be documented within the employment contract so each party is aware of their responsibilities and any necessary insurance can be arranged if required.
To find out more about insurance considerations and further information on how to maximise your insurance coverage and minimise your spend, contact Allsafe broker today.