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Insurance for Welders: A Comprehensive Guide

Thursday, January 4, 2024

Whether you’re on an automotive job or working a contract for a manufacturer, insurance for welders offers essential protection for your livelihood. 

Like any other company – whether you’re an LLC or a contractor — a welding business needs liability coverage and property insurance. But to cover industry-specific risks and needs, welders may need higher policy limits or unique lines of coverage. 

The foundation for comprehensive coverage includes general liability insurance for welders and a policy for tools and equipment. Additionally, a fabrication shop owner, for example, may need product liability insurance, and many will need workers compensation insurance if the business has employees. Most welders also need a policy that will cover trucks and other vehicles used for business. It’s a good idea to explore professional liability welding insurance coverage as it reduces your risk when something goes wrong — plus many contracts or customers will require it. 

Assembling comprehensive welders insurance that’s affordable for your business can be complicated. But rest assured, we’re here to help! In this article, we’ll explain the most common types of coverage you need and why.

Insurance for welders

What Insurance Do I Need for Welding?

All forms of insurance effectively protect the investments you’ve made to build your business and serve your customers. 

Here are the most common types of business insurance for welders: 

  • General commercial liability 
  • Equipment and tools (Inland Marine) 
  • Commercial automobile 
  • Professional liability 
  • Workers Compensation (also called Worker’s Comp)

Welders, especially, need policies that cover industry-specific hazards and expensive tools and equipment. 

For example:

  • Inland Marine coverage commonly covers tools and equipment on your truck or trailer that commercial auto policies won’t. This coverage also provides important protection for your welding business if you are involved in third-party shipping or use off-site storage for your equipment.  

As a welder, not carrying enough or the right insurance means you’re at risk of losing money if you face an on-the-job injury or provide a faulty service or product. 

As an owner, the right level of business insurance for welders is essential to protect both your assets and your employees. Worker’s comp, for instance, covers lost wages and medical bills if your employee is hurt on the job. Without proper coverage, employees can sue the business and you’re likely to face government sanctions including fines or being shut down. 

General Liability Insurance for Welders

Welding general liability insurance may be combined with commercial property coverage if you have a permanent work site or shop. While property insurance for your business covers your physical space — the building, furniture, and some equipment — liability insurance is there for the work you perform or if a non-employee is injured. For instance, this could include a slip-and-fall injury on your property or your employee accidentally damaging property on a work site. 

Generally, this coverage kicks in if your business is facing a lawsuit or is responsible for damage to a third party (physical or financial). 

For mobile welders and independent contractors, general liability insurance covers you in the event of a lawsuit stemming from damage to a customer’s property, for example. 

Liability insurance for a business or trades worker is essential for prospective lawyer fees and court-ordered payments, which could deplete your reserves and put you out of business if you aren’t covered. This coverage is key also in the event of a personal injury claim — such as a competitor suing you for libel or slander. 

Like all insurance, however, general liability coverage won’t help if you’re breaking the law in your work or intentionally causing damage or financial harm. 

self-employed workers' comp

How is General Liability Insurance Calculated for Welders?

Insurance pricing relies heavily on risk assessment. Your insurance agent will ask you questions about your business, your work sites, your clientele, annual revenue, payroll size, and more. 

At a high level, the insurance underwriter’s job is to analyze the size and location of your welding business, your claims history, and the overall property to be covered. A quote for coverage will depend on the policy’s limits, deductible, and your business profile. 

Welders should take into consideration questions like:

  • Does the policy cover subcontractors and the sub’s employees?
  • Will your property stored at an off-site location be covered?
  • Is loss of use covered under a property damage claim?
  • How much will you save by bundling business coverage with one carrier?
  • How will your rate change if you expand your business operations?

Why is Welding Insurance so Expensive?

If you’re gathering quotes for insurance as a welder, you’re probably wondering if you’re paying too high a premium. Insurance is often one of the highest expenses for a small business and working in a high-risk trade adds to the premium cost. 

The primary reason welders may face higher insurance costs is because essential coverage goes beyond what many other businesses require. 

For instance, most businesses need liability and property insurance. Any small business with work vehicles and employees will need commercial auto coverage and worker’s comp. But welders often need more. 

Professional liability coverage (sometimes called Errors and Omissions, or E&O) is essential if a contractor is blamed for project delays that cost a customer money. This line of coverage often covers legal costs associated with complaints about the quality of your work or services provided. For welders, this specific insurance can add an expense if you need particularly high coverage limits because of the high-risk nature of work or if you own a relatively new business. 

Workman’s comp coverage, too, can introduce higher-than-average insurance costs for welders. Working in and around construction, manufacturing, aerospace, and other high-risk industries means your coverage cost as a welder may be higher. 

Satisfying legal requirements for worker’s comp requires gauging the likelihood of on-the-job injuries and the extent of risk to employees and buying appropriate coverage. Because welders often will be on-site in conditions the employer can’t completely control, worker’s comp often costs more than a business facing far less risk of worker injury. 

The mobile nature of welding work for many businesses also affects the premium you’ll pay for general liability and commercial auto insurance. Additionally, because welders are in a high-heat trade and often repair or work on third-party property, insurance for liability and work safety coverage often costs more. Policy coverage limits may necessitate riders or additional lines — such as Inland Marine — to ensure your vehicles, equipment, and tools are properly protected. 

Man welding

Choosing the Right Coverage 

While how much your insurance costs is important, carrying the right amount — and the right type — is a critical investment in your livelihood. Welders need proper coverage so that the business doesn’t grind to a halt in the event of loss or theft. Sufficient insurance also can unlock future opportunities as contractors must show proper coverage before being hired. 

Comparing insurance quotes can ensure your business has quality coverage with reasonable premiums. Just make sure you’re looking at apples-to-apples terms when it comes to coverage types, policy limits, and exclusions. Businesses should review coverage annually in case there’s been a substantial change in operations. 

Choosing the right insurance for your welding business is the first step toward peace of mind. At Independent Insurance Associates, we build customized coverage and partner with top carriers to offer competitive pricing on superior insurance solutions. We’ll take the time to understand your business – give us a call