When woodworking business owners think of the biggest threats to their business, they likely imagine tragic employee accidents or large machinery malfunctions. While those are valid concerns, they are not always the cause of the most disastrous events in woodworking shops. 

At Pennsylvania Lumbermens Mutual Insurance Company (PLM), we’ve seen some of the costliest fires derive from stacked oily rag explosions, breakroom appliance disasters and improvised electrical fixes. These may not be the factors at the forefront of woodworking business owners’ minds, but they have been the culprit of multi-million-dollar insurance claims. 

Consider the following examples, which can happen to any woodworking business, where seemingly small oversights turned into costly losses:

1. Recipe for combustion 
   Team members often use rags to wipe down machinery. By the end of the day, those rags will likely be damp with oil and other combustible substances. If an employee opted to toss that rag on a workbench, or in an open can and head home for the night, that could mean trouble. While on the surface there is no harm done, in reality, that employee just exposed the shop to a major fire risk.  

   Improperly stored oily rags can spontaneously combust, especially when piled together. When this happens, a small fire can spread quickly to surrounding flammable materials. Fortunately, woodworking business owners can implement the use of UL-300-approved cans for approximately $100. If rags were to combust, any explosions in the correct receptacle will contain any explosions.

2. Low-cost appliance, high-cost damages 
   Break rooms are often equipped with secondhand, outdated appliances. While this helps limit expenses in the short term, old microwaves, refrigerators and coffee makers can be dangerous and costly if not properly maintained. We have seen entire facilities set ablaze because a refrigerator compressor malfunctioned on a Friday evening after everyone had gone home. Because nobody was around to respond, everything was gone by the following Monday.

   Old appliances, or those with signs of malfunctioning should not be ignored. Just because the appliance “still works” does not mean it’s safe for use. Employees should be encouraged to notify leadership of seemingly simple issues such as a humming refrigerator, a microwave with a frayed cord or an overheating coffee maker. As an additional measure, all appliances, except for the refrigerator, should be unplugged overnight. Doing so could help avoid disastrous overnight or weekend fires.

3. Frayed wires, big fires
   Extension cords and power strips are commonplace in woodworking businesses. When a new tool needs power and the nearest outlet is too far away, it’s easy to grab an extension cord to keep a job moving. But problems arise when a temporary fix becomes a permanent solution. 

   Interconnected surge protectors, extension cords buried under sawdust and frayed electrical wires can contribute to fires. Extension cords and surge protectors should never be a long-term solution. If a woodworking business does not have enough outlets, owners should work with a certified electrician to add more. Doing so will help ensure circuits do not get overloaded and cords do not get buried under sawdust and other materials, contributing to a fire event. 

Fires don’t need a grand entrance
Too often, fires resulting from the above examples happen over the weekend or after hours. As such, owners do not become aware of a fire until it has already caused millions of dollars in damage. To make matters worse, these fires often cost owners more than just property. They shut down operations, delay customer orders and jeopardize reputations. The loss in business interruption and market share can be just as devastating as the property damage.  

Fortunately, the steps to mitigate such small, overlooked risks do not require a complete overhaul of woodshop operations. It comes down to consistent, effective maintenance. Consider the following simple risk mitigation steps for woodworking businesses: 

• Prioritize employee training: To effectively address a woodworking business’s risks, all employees need to be on the same page about what is at stake and how to take part in preventing losses. Thorough training on used rag storage and electrical best practices could prevent a multi-million-dollar loss.
• Implement safety routines: At the end of every day, team members should be required to check their stations or areas for unsecured flammable materials or plugged-in tools and machinery. A team member should be designated to survey the break room as well, unplugging all unnecessary appliances.   
• Woodshop walkthroughs: Woodworking business owners and management teams should routinely walk through their shops to look for any potential problems. If anything looks like a shortcut or shows signs of breaking down, permanent solutions should be discussed immediately.

Woodworking through an insurance lens 
Among the many concerns woodworking business owners must have top of mind, small, easy-to-overlook risks can quickly be swept under the rug. An insurance partner who truly understands the woodworking industry, the risks owners face, and speaks the same industry language is an invaluable partner in avoiding major losses from preventable scenarios. 

At PLM, we stress to our insureds the importance of regular maintenance and diligent housekeeping to prevent unnecessary losses and share examples of real-life scenarios that nearly shut down similar businesses. An insurance partner who truly understands the woodworking niche, trends in the space, and how to talk to woodshop owners can be an added line of defense with the business’s best interest in mind. 

It’s not always the big, obvious concerns that do the most damage; it’s often the small details that go unnoticed until it is too late. By taking simple, proactive steps to address a woodshop’s nuanced risks and by working with an insurance provider who truly understands the industry, woodshop owners can protect their teams and their businesses. 

The woodworking industry is one of craftsmanship and attention to detail. If woodshop owners apply that same mindset to risk mitigation, their businesses and employees will benefit from a safer, more comfortable workplace set to operate for years to come. 

About the Author: Sean Briscoe is vice president of loss control at Pennsylvania Lumbermens Mutual Insurance Company (PLM).