How Much Does Carpenter Insurance Cost? 2025 Rates

In 2025, U.S. carpenters can expect to pay between $960 annually for comprehensive business insurance, averaging $80 per month. The primary cost drivers are your location, type of work you do, coverage limits, business size, experience level, and tools & equipment value.

How Much Does Carpenter Insurance Cost?

The average carpenter in the U.S. pays $960 per year for a full business insurance package. That breaks down to roughly $80 per month. However, this is just a ballpark range and actual costs can vary widely depending on your specific situation.

Every carpentry business comes with its own set of risks, so insurance costs aren’t the same for everyone. A carpenter doing small home projects will likely pay much less than a larger company handling big construction jobs with multiple employees and expensive equipment.

Several factors can affect your insurance premium, like the type of carpentry work you do, the tools and materials you use, and where your business is located. For example, carpenters working on high-risk sites or in areas with more theft or accidents may pay more for liability and equipment coverage.

Likewise, a carpenter who mostly works indoors may pay less than a framing contractor using heavy-duty tools and working at heights, since the latter carries more risk of injury or damage.

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• Property size and value (affects commercial property coverage)
• Past claims history (insurers charge more if you’ve filed claims)
• Value of Tools, Equipment, and Property (affects contractor tools and equipment insurance & commercial property insurance)
• Business interruption coverage and other add-ons

Understanding these variables can help you better estimate your insurance needs and prepare for the real costs of protecting your carpenter business.

Average Carpenter Insurance Costs For Coverage Types

When it comes to protecting your carpenter business, different types of insurance cover different risks. Understanding the average cost, coverage details, and what influences pricing for each policy type can help you build a more effective insurance plan.

Here’s a closer look at the major coverages most carpenters need.

• General liability insurance: $80 per month
• Business owner’s policy: $112 per month
• Workers’ compensation insurance: $279 per month
• Commercial auto insurance: $155 per month
• Commercial umbrella insurance: $85 per month
• Builder’s risk insurance: $82 per month
• Contractor’s tools and equipment: $17 per month

General Liability Insurance

The average cost of general liability insurance for a carpenter is about $80 per month.

General liability covers third-party bodily injury, property damage, and advertising injuries. For example, if you’re installing cabinets in a customer’s home and you accidentally crack a tile floor, or if someone trips over your toolbox and gets injured, this insurance can help cover repair costs, medical bills, and even legal fees if you’re taken to court.

Typical policy limits are $1 million per occurrence and $2 million aggregate.

The price of general liability insurance depends on things like how much coverage you need, how big your business is, how many people come to your job sites, and whether you hire subcontractors or add others to your policy.

Business Owner’s Policy (BOP)

The average cost of a business owner’s policy (BOP) is about $112 per month for carpenters.

A BOP bundles general liability insurance with commercial property insurance. It protects against customer injuries, property damage, and loss or damage to equipment. For example, if a fire breaks out in your workshop and damages your saws, and materials, a BOP can help pay for repairs and replacements.

Typical policy limits are $1 million per occurrence and $2 million aggregate for liability, with separate property coverage limits based on the value insured.

The price of a business owner’s policy depends on things like how much protection you want, how big your business is, how many people come to your workplace, and how valuable your tools, equipment, and property are.

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for a carpenter is around $279 per month.

Workers’ comp covers medical bills, rehabilitation, and lost wages for employees injured on the job. For example, if a carpenter cuts their hand while using a saw, this insurance would help pay for their hospital visit and provide some income while they take time off to heal.

Policy limits are regulated by each state, but typically include medical costs and a percentage of lost wages without a set cap.

The cost of workers’ compensation insurance depends on how many employees you have and the kind of carpentry work they do. Riskier jobs usually mean higher insurance costs.

Commercial Auto Insurance

The average cost of commercial auto insurance for carpenters is about $155 per month.

Commercial auto insurance covers vehicles owned or used by the business for accidents, theft, vandalism, or damage. For example, if you’re driving your work truck to a job site and get into an accident, this insurance can help pay for vehicle repairs and any damage or injuries caused to others. It’s important for covering business-related driving risks.

The cost of commercial auto insurance depends on the type of coverage you pick, how much the vehicle is worth, and the driving history of anyone who will be using it for work.

Commercial Umbrella Insurance

The average cost of commercial umbrella insurance for carpenters is about $85 per month.

Commercial umbrella insurance is extra liability coverage that kicks in when your other business insurance limits are used up. It gives your business extra protection against big claims or lawsuits that go beyond the limits of your general liability, commercial auto, or other policies.

The price of commercial umbrella insurance mainly depends on how much extra coverage you choose to buy.

Builder’s Risk Insurance

The average cost of builder’s risk  insurance for carpenters is about $82 per month.

Builders risk insurance is a type of coverage that protects buildings and structures while they’re being built or renovated. For carpenters, it covers the work in progress, including materials, tools, and the structure itself, from risks like fire, theft, vandalism, or weather damage during construction.

The cost of builder’s risk insurance is based on how much the finished building will be worth.

Contractor’s Tools And Equipment

The average cost of contractor’s tools and equipment for carpenters is about $17 per month.

Contractors tools and equipment insurance for carpenters is a type of coverage that protects your tools and equipment if they get lost, stolen, or damaged.

Since carpenters rely heavily on their tools, like saws, drills, and ladders, this insurance helps cover the cost to repair or replace them, whether they’re on the job site, in your vehicle, or in storage.

The cost of contractor tools and equipment insurance depends on how much your tools are worth and the kind of jobs you do.

What Factors Impact Your Carpenter Insurance Costs?

Carpenter insurance premiums are carefully calculated by underwriters based on your business’s risk profile. Factors like the types of projects you work on, where you operate, and your past claims all affect how much you’ll pay for insurance.

Type Of Work You Do

The kind of carpentry work you do can change how much your insurance costs. For example, if you mainly do small repair jobs, your insurance might be cheaper. But if you work on big construction sites or use heavy tools, your risk is higher, and your premiums may be more.

Size Of Your Business

How many people work for you matters. A single carpenter usually pays less for insurance than a company with several employees because there are fewer chances for accidents and claims.

Value Of Your Tools And Equipment

If you have expensive tools and machines, your insurance will cost more. This is because the insurance has to cover the cost of fixing or replacing them if they get lost, stolen, or damaged.

Location

Where your business operates can affect your insurance rates. Some areas might have higher risks of theft, accidents, or natural disasters, so insurance may cost more there compared to safer locations.

Coverage Limits And Options

The amount of coverage you choose also impacts the price. Higher limits or extra coverages (like protection for tools, vehicles, or workers) usually mean paying more for insurance.

How To Lower Your Carpenter Insurance Costs

Running a carpentry business can be costly, but your insurance doesn’t have to be. You still need good coverage, but there are smart ways to lower your insurance costs without losing important protection. Here are some easy tips to help you save money on your carpenter insurance:

1. Bundle Your Policies

One of the easiest ways to save is by bundling multiple policies. Most insurers offer a Business Owner’s Policy (BOP) that combines general liability and property insurance at a lower rate than if you bought them separately. If you also need workers’ compensation, bundling both through the same provider can lead to additional discounts. Not only does this simplify your paperwork, but it also makes your coverage more cost-efficient.

2. Ask About Discounts

Insurance companies often reward carpenters that commit to a policy long-term. Ask your provider if they offer multi-year discounts for signing a two- or three-year agreement instead of renewing annually. You might also qualify for lower rates if you pay your premium in full instead of in monthly installments.

3. Implement Safety Measures

Accidents can cost a lot, for you and your insurance company. If you take steps to keep your job sites safe, you may pay less for insurance over time. For example, keeping your work area clean, putting away tools when not in use, using safety signs, and making sure your equipment is in good condition can help prevent injuries. This lowers your risk and can lead to cheaper insurance.

4. Create A Safe Working Environment

Having a good safety program can help lower your workers’ compensation costs. This means training your team on how to use tools safely, lift heavy materials the right way, follow fire safety rules, and know what to do in an emergency. When your workers stay safe and there are fewer accidents, you’ll have fewer insurance claims, and that can lead to lower insurance costs later on.

5. Adjust Your Deductible

Your deductible is the amount you pay out of pocket before insurance coverage kicks in. Choosing a higher deductible can significantly reduce your monthly premiums. Just make sure you can comfortably cover that amount if a claim arises.

By taking these steps, you not only save money but also make your business a safer, and more resilient business.