Sheet metal contractors are exposed to a number of risks, from fire hazards to auto accidents. Purchasing a range of insurance policies is a key way to manage your liabilities. The financial protection business insurance provides will help your business stay strong even if unexpected disasters occur. 

What insurance coverage do I need for my sheet metal business?

There are many types of insurance coverage to consider, but these policies are particularly relevant to sheet metal businesses:

Commercial Property Insurance

If your business property is damaged or destroyed by a covered peril, commercial property insurance can pay for replacement or repair. Sheet metal work often involves welding, sanding, grinding, and lathe operations that can cause sparks or metal dust. This can lead to an increased fire risk. The presence of lubricants, solvents, and other combustible materials also presents a danger. 

While the appropriate safety and cleaning measures should be implemented in order to reduce the risk of fire, it’s impossible to prepare for every situation. Commercial property insurance can help provide coverage for your buildings, equipment, tools, inventory, supplies, and other items. Commonly covered perils include fire, explosion, windstorms, hail, vandalism, and water damage.

Example:

• A fire breaks out in your workshop, causing serious damage to a number of expensive machines as well as damaging the building. Your commercial property insurance would provide funds for you to repair the building and replace damaged equipment. 

Equipment Breakdown Insurance

Sheet metal work relies heavily on specialized equipment, which could be costly and time-consuming to repair in the event of a breakdown. It’s important to be aware that commercial property insurance only covers damage caused by external hazards and would not cover situations where equipment malfunctions due to mechanical failures or other internal problems. In those situations, equipment breakdown insurance can step in, paying to repair or replace covered equipment that breaks down, as well as reimbursing you for income lost while the equipment is out of commission. 

Example:

• One of your metal shearing machines malfunctions and you are unable to use it while you wait to receive the parts needed to repair it. Many projects are delayed as a result. Equipment breakdowns insurance will pay for the costs of repair and cover your lost income. 

Inland Marine Insurance

If you do installation work at customers’ premises, you may need to consider inland marine insurance. Inland marine insurance provides financial protection for your business property that does not remain at a fixed location and is not covered by a standard commercial property insurance policy. This could include equipment, tools, supplies, and other items that your sheet metal company may need to transport from location to location or store at client sites.

Installation floaters are a common type of inland marine insurance that specifically cover your business while building or installation is in progress. Installation floaters cover materials, supplies, and equipment while in transit, waiting to be installed, and during the installation process. This coverage can be purchased for a specific project or to cover all projects for a specified period of time.

Example:

• As you are transporting materials to a client worksite, your truck is involved in a car crash, leading to the truck being overturned. The sheet metal that was being transported on the truck is severely damaged. Inland marine insurance would cover the loss.

Workers’ Compensation Insurance

Sheet metal workers often use potentially dangerous machinery, lift heavy objects, and are exposed to airborne metal shavings, high noise levels that could cause hearing loss, and other hazards. In addition to ensuring that your employees follow safe working practices, it’s crucial to ensure that you have sufficient workers’ compensation coverage in case an injury occurs. 

Workers’ compensation insurance provides financial and medical benefits for your employees or their survivors in the case of a work-related injury, illness, or death. This coverage is legally required in almost all states, and companies may face severe fines or penalties if they do not follow their state’s guidelines for workers’ comp.

Example:

• One of your employees sustains a burn while welding. Workers’ comp would pay for his medical bills and a portion of lost income while he recovers and is unable to work.

Pollution Liability Insurance

Pollution liability insurance covers bodily injury, property damage, and cleanup costs caused by pollutants that are released in the course of your company’s work. Metalworking operations often use paint, solvents, and other chemicals that could contaminate the ground, water, or air in the area. If you are held liable for causing pollution-related damage, you may be required to pay for expensive cleanup costs and fines. Pollution liability insurance will provide financial support if your company causes environmental damage.

Example:

• A tank used to store solvents leaks and contaminates a well nearby. Your pollution liability insurance would cover legal fees and cleanup costs associated with the claim. 

Commercial Auto Insurance

Many sheet metal companies use vehicles to collect materials or deliver items to customers. If your business owns or leases vehicles titled under the business’s name, commercial auto insurance is a key coverage to secure. If one of your employees causes an accident while driving a company vehicle, your commercial auto insurance will pay for third-party bodily injury, property damage, or pollution cleanup. Commercial auto insurance also covers the value of the vehicle itself if it’s damaged by a collision or another peril, like a falling object or theft.

Example:

• While delivering a load of metal panels to a client, one of your employees hydroplanes on a wet road and collides with another vehicle. Commercial auto insurance would provide coverage for the damage to vehicles and for injuries to the occupants of the other car. 

General Liability Insurance

General liability insurance covers incidents of accidental third-party property damage, bodily injury, personal injury, and advertising injury. There’s always a possibility that your employees and their work could unintentionally end up causing property damage or injuring someone. This is especially relevant if your company works at various locations or allows customers to visit your property, but all companies have some level of general liability risk. If your business is sued by a third party as a result of injury or property damage, general liability insurance can provide funds to cover legal fees, judgments, and settlements, in addition to medical payments.

General liability insurance also provides coverage for injury or damage caused by your products and completed operations. If your finished metalwork causes someone to be injured or damages property, you could be held liable. General liability insurance would cover medical costs and legal fees for these claims. However, it’s important to note that products and completed operations coverage does not cover damage to your product or completed work itself; it only applies if the completed work causes damage to a customer’s other property.

Examples:

• Bodily injury: A client trips over tools you left out and falls, breaking his elbow. He sues your company for negligence. Your general liability insurance would pay for medical expenses and legal fees.
• Products and completed operations: Your company installs metal ductwork in a parking garage, but several weeks later it turns out that a mistake was made while fastening the ducts. They fall and damage several parked cars. Your general liability insurance would cover the claim. 

Additional Coverages

• Business income coverage will reimburse you for lost income and operating expenses if your business is forced to temporarily close due to a covered peril, such as fire, storm damage, or other property damage.
• A business owner’s policy combines general liability, property, business income, and extra expense coverage into a single package. For small or midsize sheet metal businesses, this type of insurance could help you obtain a wide range of coverage. Premiums for a business owner’s policy are typically cheaper than the cost of buying each coverage separately.
• Commercial crime insurance provides protection from financial losses related to crimes such as theft, burglary, robbery, forgery, and fraud. Both third-party crime and employee dishonesty are covered by this insurance. 

Pricing and Quotes

Pricing for sheet metal contractors insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a sheet metal contractor with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for sheet metal businesses:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Final Word

When you run a sheet metal business, it’s important to consider purchasing insurance coverage that will protect your company from the many risks that could arise in the course of your work. If an unexpected disaster occurs, whether it’s a fire, an injury caused by your work, or an expensive auto accident, recovering can be difficult and costly. Insurance coverage can provide financial protection that will allow you to continue operating even after a disaster.