It’s arguably one of the oldest industries out there. Peoplehave been turning trees into valuable wood products sincecivilization began. Yet the lumber industry has endured throughchanges in building materials and construction — so it’s nosurprise that insurers long ago spotted an opportunity to cover thelumber industry, historically subject to serious fire losses.

In the 19th century, a few insurance companies (such as mycompany, Pennsylvania Lumbermens Mutual Insurance Company) wereformed by lumbermen, for lumbermen because the owners oflumberyards felt that stock-held insurance companies didn’tunderstand the lumber business and were either overcharging forcoverage or didn’t provide insurance coverage at all. Furthermore,these insurance companies didn’t have the deep understanding of therisks and challenges that are specific to lumber-related operationsand 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 thedecades, grew to serve the lumber, woodworking and buildingmaterial industries.

Although much has changed, the fundamental issues related toinsuring lumber, woodworking and building material industries havenot. Proactive loss prevention and industry expertise remaincritical to insuring businesses in the “lumber niche.”

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