Carpenter insurance shouldn’t be as complex as the custom creations you build. At ContractorNerd, our proprietary quote platform connects you with contractor-friendly insurers, all supported by our team of tech-enabled, specialized agents who understand how to navigate carpenter insurance complexities. Get multiple tailored quotes and buy coverage in minutes – all from your computer or phone.
Data drives our entire approach. By analyzing 800+ carpenter insurance quotes, we deliver clarity on essential coverages and quote expectations by state and company size. Our comprehensive analysis helps you understand the insurance landscape and make informed decisions for your carpentry business.
This comprehensive carpenter insurance guide provides essential coverage insights and quote expectations based on our analysis of 800+ carpenter insurance quotes:
- Essential Coverage Types – General Liability, Workers’ Compensation, Tools & Equipment, and Commercial Auto insurance for carpenters
- Critical Class Codes – GL codes 91340 (Residential), 91341 (Interior), 91342 (Commercial); WC codes 5403, 5437, 5645
- Quote Benchmarks – General Liability typically 1-3% of annual revenue; Workers’ Comp rates $4 – $12.50 per $100 payroll
- Business Size Analysis – Quote data covering operations from $150K to $1M+ in annual revenue
- Specialized Coverages – Contractor’s E&O, Commercial Property, Umbrella Insurance, and industry-specific bonds
Let’s get started.
Carpenters Insurance – What Do You Need?
For carpenters, selecting the appropriate insurance coverage is crucial and varies based on the size and stage of your business. Here’s a guideline:
Sole Proprietor Carpenters:
- Carpenter Liability (aka General Liability) insurance is fundamental covering property damage and non-employee bodily injury. Many customers will ask if you’re licensed and insured; this is the insurance they are asking about.
- Tools and Equipment coverage is also recommended. This covers your tools which enable you to do good work.
- Contractor’s E&O (aka Faulty Workmanship) coverage protects you against claims arising out of faulty workmanship, materials or products.
- Commercial Auto coverage is needed if you have a truck you use exclusively for work.
Small Carpentry Business (1-3 Employees):
- Workers compensation is required when you hire employees (not subcontractors; although you’ll need to confirm they have coverage)
- Installation Floater covers materials, equipment and property in transit to or stored at job sites awaiting installation – critical for carpenters who fabricate custom items like cabinets, countertops, or built-ins that need transportation and on-site storage before final installation.
- Buildings & Contents coverage protects your facility and its contents against fire, theft, and damage – essential for carpenters with workshops or storage spaces due to fire risks from wood materials.
Established Carpentry Business (5+ Employees):
- Commercial property is important to protect workshops, lumber storage areas, and offices.
- Umbrella Insurance (or higher limits on your Carpenter Liability) should be considered as your business grows in revenue and project count.
- Employment practices liability insurance (EPLI) to protect owners against potential lawsuits from employees.
Carpenter Liability Insurance – aka General Liability
If there was a single coverage critical for all Carpenters, this is it. Carpenters need this insurance because your work involves many risks every day – power tools, heights, debris, etc. Types of claims commonly faced include:
- Property Damage: Accidental damage to a client’s building, floors, walls, etc.
- Bodily Injury: A client, visitor or bystander getting hurt due to your work activities.
- Defective Products: Lawsuits over an installed product that turns out defective.(Add-On)
- Completed Work: Lawsuits over issues from past completed jobs. (Add-On)
Liability Limits for Carpenters: Most carpenters get $1 million per occurrence and $2 million in aggregate. Lower limits are available, but the typical cost of increasing coverage from $500,000 to $1 million is minimal and significantly enhances defense capabilities, so most go with $1M / $2M limits.
Liability Premiums for Carpenters: Generally, 1% to 3% of your annual revenue. Our summarized quote data below shows how this average premiums from leading carriers changes by State. These average premiums are specific to the carpentry industry.
Key Factors Influencing Carpenter Liability Premiums Include:
- Revenue: Higher revenue means more work and potential claims
- Policy Limits: Higher limits means more risk and higher premiums
- Claims History: Clean record means lower premiums
- Location: State regulations and cost of claims impacts premiums
- Class Codes: Different carpentry specialties carry varying risks; here are some class codes that carpenters use; most commonly 91340, 91341, 91242:
- Class 91340: Residential Carpentry – Cover remodeling, repairs, additions under 3 stories, basic electrical work, limited roofing/foundation work (10% revenue cap), work within 12ft below grade, retaining walls under 6ft, slopes under 20°.
- Class 91341: Interior Carpentry – Covers interior finishing work including cabinet installation, shelving, stairs, woodwork, trim, molding, baseboards, and countertops (no tile).
- Class 91342: Commercial Carpentry – Covers commercial remodeling, tenant improvements, and repairs including electrical (≤480V), exterior work (≤3 stories), limited roofing/foundation work (10% revenue cap), retaining walls under 6ft, and below-grade work up to 12ft.
Carpenter Insurance Cost – ContractorNerd’s Quotes Study
We crunched the numbers with over 800 General Liability insurance quotes from leading carriers for carpenters across different states and business sizes. Below is a table summarizing typical general liability insurance premiums for carpenters and carpentry contractors based on a sample of states. Each scenario assumes the following for each revenue size:
- $150K Revenue: Assumes 1 owner with ~10% subcontracting costs and 5+ years of operating without claims.
- $500K Revenue: Assumes 1 owner and 3 employees with ~10% subcontracting costs and 5+ years of operating without claims.
- $1M Revenue: Assumes 1 owner and 5 employees with ~10% subcontracting costs and 5+ years of operating without claims.
Carpenter liability insurance premiums vary significantly based on annual revenue, with costs ranging from approximately 1.3% to 3.1% of gross revenue. Our analysis reveals that carpenters across different revenue brackets can achieve substantial savings by shopping for competitive rates, with potential savings ranging from 32% to 40% off national average premiums.
For small carpentry operations generating $150,000 in annual revenue, the national average premium sits at $3,580 per year. However, favorable rates can bring this down to $2,150, representing a 40% savings. As businesses scale, the percentage of revenue dedicated to insurance generally decreases, though absolute costs increase. Mid-size operations with $500,000 in revenue face average premiums of $9,710, while larger firms approaching $1 million in revenue can expect average costs around $21,040 annually.
These figures represent national averages, but actual costs can vary dramatically by location. Our comprehensive analysis of carpenter insurance rates across all 50 states reveals significant regional variations, with some states commanding premiums 50% higher than the national average due to factors like litigation frequency, state regulations, and local market conditions. Carpenters should carefully evaluate their specific risk profile and compare multiple carriers to secure the most competitive rates for their business.
| Revenue Level | National Average | Favorable Rate | Potential Savings | Low % of Revenue | High % of Revenue |
|---|---|---|---|---|---|
| $150,000 | $3,580 | $2,150 | 40% | 1.6% | 3.1% |
| $500,000 | $9,710 | $6,600 | 32% | 1.3% | 2.5% |
| $1,000,000 | $21,040 | $13,200 | 37% | 1.4% | 2.7% |
For additional detail on costs in your area, we’ve written a comprehensive guide on the cost of carpenter insurance across all 50 states.
Workers’ Compensation Insurance for Carpenters
For carpentry businesses with employees, it’s essential to have Workers Compensation Insurance for Carpenters. This mandatory coverage offers critical benefits such as medical care, partial wage replacement, rehabilitation services, and death benefits for employees who suffer job-related injuries or illnesses. Workers’ compensation insurance premiums are based on the job-related risk, which is categorized into class codes. Common NCCI class codes for carpenters are 5403, 5437, and 5645. The typical rate ranges from $4.23 to $12.52 per $100 of payroll annually per employee.
- Code 5403: For carpenters on commercial projects or residential buildings over 3 stories. Includes all carpentry work on office buildings, retail spaces, apartments, mixed-use buildings. Used by commercial contractors & large-scale builders.
- Code 5437: For carpenters installing cabinets, interior trim, countertops (except stone), hardwood floors. Common for cabinet installers, finish carpenters, and kitchen remodeling specialists doing interior millwork.
- Code 5645: For carpenters building 1-2 family homes up to 3 stories. Includes framing, decking, siding, trim work, cabinet/window/door installation. Common for residential builders & remodeling contractors working on single-family homes.
WC Policy Limits for Carpenters: the policy limits for workers’ compensation typically have no cap but may vary according to state regulations.
WC Rates for Carpenters: the typical premium ranges from $4.00 to $12.50 per $100 of payroll.
Factors Influencing WC Premiums for Carpenters:
- Class codes: Different rates for different classes based on risk
- Experience modifier: Premium multiplier tied to claims history and experience
- Payroll: Premium = (payroll/100) × rate × experience modifier
- State: Local laws and costs affect rates
If you’d like to learn more, see other state rates and try our calculator, check our guide on Workers’ Compensation Insurance for Carpenters.
Additional Insurance Carpenters Should Consider
Beyond the essential policies detailed above, here are additional insurance types carpenters may need as their business grows:
Tools & Equipment Insurance (Inland Marine)
Inland Marine Insurance protects tools and equipment during transit and at job sites against loss, theft, or damage. Annual premiums range from $200-$2,000, with policy limits of $5,000-$15,000+. Most policies have per-item limits (typically $5,000).
Contractors’ E&O Insurance
Protects against business mistakes and negligence claims in construction work. Covers costs if clients claim faulty work, wrong installations, or subpar service. Includes professional negligence claims, legal defense, and judgments. Annual premiums range from $50-$500, with policy limits of $10,000-$1M+.
Commercial Auto Insurance for Carpenters
Commercial auto insurance protects work vehicles and covers liability from accidents during business operations. Personal auto policies don’t cover business use. Premiums range from $1,500-$3,050 per vehicle annually. Standard limits are $100K per person, $300K per accident, and $100K property damage, though higher limits ($500K-$1M) are recommended for comprehensive protection.
Bonds for Carpenters
Surety bonds guarantee work quality and fulfill licensing requirements. Typical bond amounts range $5,000-$25,000, with carpenters paying 1-3% as premium. Premium costs vary by credit score:
| Bond Amount | Excellent Credit | Good Credit | Bad Credit |
|---|---|---|---|
| $5,000 | $100 – $150 | $150 – $200 | $200 – $400 |
| $10,000 | $100 – $300 | $300 – $500 | $500 – $1,000 |
| $15,000 | $150 – $400 | $400 – $750 | $750 – $1,500 |
| $20,000 | $180 – $500 | $500 – $1,000 | $1,000 – $2,000 |
| $25,000 | $200 – $500 | $500 – $1,200 | $1,200 – $2,500 |
Requirements vary by state – California requires $25,000 bonds while Texas has no statewide mandate.
Commercial Property Insurance for Carpenters
Commercial property insurance protects buildings and contents (tools, lumber, equipment) against fire, theft, vandalism, and weather damage. Essential for carpentry businesses with workshops, lumber yards, or showrooms. Annual premiums range $1,000-$5,000, based on property value, location risks (disasters, crime), and building construction type.
Business Owner’s Policy (BOP) for Carpenters
A Business Owner’s Policy bundles general liability and commercial property insurance. This can be a better option for businesses with physical locations, it covers customer injuries, property damage, business assets, and business interruption. Typically you will see lower premiums than separate policies but less flexibility. Premiums based on business size, location, claims history, and additional coverage added.
Commercial Umbrella Insurance for Carpenters
An alternative to increasing your limits on your general liability policy is an umbrella policy. This type of insurance provides additional liability coverage, extending beyond the limits of your standard policies like general liability, auto liability, and employer’s liability. In the event of a substantial claim that surpasses the limits of your primary policies, umbrella insurance steps in, offering extra financial protection. Typically adds $1M coverage (up to $2M+ available). Annual premiums: $500-$1,000.
Employment Practices Liability Insurance for Carpenters
Protects against employee claims of discrimination, harassment, wrongful termination, and other workplace issues. Annual premiums: $1,000-$5,000. Policy limits: $100,000-$1M.
Cyber Liability Insurance for Carpenters
Protects against data breaches and cyberattacks, covering investigation, customer notification, credit monitoring, PR, and legal costs. Policy limits: $100K-$1M. Annual premiums: $300-$1,000.
Protect Your Carpentry Business the Smart Way
Running a successful carpentry business is complex enough without insurance hassles. Whether you’re a cabinet maker or framing contractor, you need coverage that fits your specific risks – and premiums can vary by 40% between carriers for identical protection.
Why carpenters choose ContractorNerd for ALL their insurance needs:
✓ Complete Coverage, One Platform – General liability, workers’ comp, commercial auto, umbrella policies – all in one place. No more juggling multiple agents or carriers.
✓ Know You’re Protected – See exactly what you’re covered for and what you’re paying. Compare options to ensure the right protection at the right price.
✓ Win More Jobs with Instant COIs – While competitors wait for agent callbacks, you’re sending digital Certificates of Insurance in seconds. Land jobs faster by delivering proof of coverage immediately from your phone or computer.
Our platform is built specifically for trades professionals. We’ve partnered with carpenter-friendly insurers who understand your unique risks – from class codes to specialized coverage needs.
Ready to see what proper protection should really cost? Get instant, no-obligation quotes from multiple A-rated insurers in minutes.