It’s arguably one of the oldest industries out there. People have been turning trees into valuable wood products since civilization began. Yet the lumber industry has endured through changes in building materials and construction — so it’s no surprise that insurers long ago spotted an opportunity to cover the lumber industry, historically subject to serious fire losses.

In the 19th century, a few insurance companies (such as my company, Pennsylvania Lumbermens Mutual Insurance Company) were formed by lumbermen, for lumbermen because the owners of lumberyards felt that stock-held insurance companies didn’t understand the lumber business and were either overcharging for coverage or didn’t provide insurance coverage at all. Furthermore, these insurance companies didn’t have the deep understanding of the risks and challenges that are specific to lumber-related operations and the long-term view and focus that is needed to provide property & casualty insurance coverage for these types of risks. Thus, the mutual lumber insurance niche was created and, over the decades, grew to serve the lumber, woodworking and building material industries.

Although much has changed, the fundamental issues related to insuring lumber, woodworking and building material industries have not. Proactive loss prevention and industry expertise remain critical to insuring businesses in the “lumber niche.”