Salvage Yard Insurance

If you own a salvage yard, it's critical to protect your business against losses that can occur due to accidents on the premises, employee injuries, theft, vandalism, and more.

Christine Lacagnina Written by Christine Lacagnina
Christine Lacagnina
Written by Christine Lacagnina

Christine Lacagnina has written thousands of insurance-based articles for by authoring consumable, understandable content.

paul martin Reviewed by Paul Martin
paul martin
Reviewed by Paul Martin

Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.

Crane loader taking scrap iron. Find Salvage Yard Insurance.

Salvage yards buy old cars and other vehicles, remove functioning parts, and sell them as used auto parts. Some parts may even be overhauled to be sold at retail stores, while any remaining unusable vehicles and parts are compressed and sold to scrap dealers. Salvage yard owners must protect their businesses with the right kind of business insurance so they can get important reimbursement after a number of different possible disasters, such as fire damage, vandalism, etc.

Fortunately, a local independent insurance agent can help you get set up with all the auto salvage yard insurance you need. They'll make sure your business gets equipped with the appropriate amount of coverage. But first, here's a breakdown of insurance for auto salvage yards, what it covers, and more.

Why Is Salvage Yard Insurance Necessary?

Salvage yards can be dangerous places for the public and employees alike. Insurance for salvage yards can be a complex niche, which is why it’s critical to understand your risks, take steps to minimize any safety hazards present on your premises and find the right coverage that can help your business recover financially if something goes wrong. Salvage yards often have the following possible hazards that may need coverage:

  • Heavy or jagged scraps on the property
  • Customers and the general public frequenting the premises
  • Potentially dangerous crushing operations
  • Potentially dangerous parts, cars, and scrap recycling operations
  • Parts and equipment that may be attractive to thieves or vandals
  • Pollutants that could harm the environment, employees, or third parties

Anyone who visits your premises, from employees to customers, vendors, and suppliers, is susceptible to injuries. If a member of the public or an employee gets injured by your business in any way, your salvage yard could face a lawsuit. Without the right salvage yard insurance, your business could face a hefty financial loss from which it may not be able to recover.

What Does Salvage Yard Insurance Cover?

Salvage yard insurance isn’t a single type of coverage. Insurance for a salvage yard is really a package of business insurance coverages designed to cover your unique and specific property and liability risks. Your salvage yard insurance policy may likely include some or all of the following types of coverage: 

  • Commercial general liability insurance: This protects your business from costs related to claims of bodily injury or property damage your business may cause to third parties. 
  • Commercial property insurance: This protects your business if a fire, break-in, theft, or another listed peril damages your business property, like inventory, buildings, etc.
  • Business interruption insurance: This protects your business while it's temporarily unable to operate because of damage caused by a listed peril leading to a disruption (e.g., fire, hail, equipment breakdown) by providing a continued stream of income and paying for other expenses such as rent and employee salaries.
  • Commercial vehicle insurance: This covers any vehicles that your business owns against incidents like theft, vandalism, lawsuits, etc. 
  • Employee dishonesty and crime insurance: This can protect your businesses from the costs of theft, dishonesty, and fraudulent acts committed by an employee, or acts of forgery, unauthorized electronic funds transfers, fraud, etc., committed by any criminal.
  • Equipment breakdown insurance: This covers certain costs associated with the accidental breakdown of machinery or equipment and the resulting property damage or loss, which may be caused by power surges, motor burnout, malfunctions, and even operator error. 
  • Pollution liability insurance: This covers the costs of liability claims stemming from property damage, injury, or other harm caused by hazardous waste or other pollutants from your business. 
  • Workers’ compensation insurance: This covers medical treatments, lost wages, and more in the event of employee injuries or illnesses caused by the business environment or work tasks.
  • Commercial umbrella insurance: This can extend your business's liability coverage to limits of $1 million or greater, which can be critical in case of a major lawsuit.

An independent insurance agent can help you complete the right salvage yard insurance policy for your business.


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Other Types of Business Insurance Salvage Yards May Need 

You may still need several other types of business insurance coverage to properly protect your salvage yard from business disruptions, lawsuits, and property losses. Talk to an independent insurance agent to determine if you need any of the following for your auto salvage yard: 

  • Professional liability insurance: This coverage is important to protect your business against claims of professional errors, such as for odometer, truth in lending, and title-related claims.
  • Garagekeepers liability insurance: This covers damage, theft, etc., to customers’ vehicles in your salvage yard's care, custody, and control. 
  • Inland marine insurance: This covers your business's tools, equipment, and supplies while in transit against damage, theft, etc.
  • Product liability insurance: This covers losses or injuries to a user, buyer, or bystander caused by a defect or malfunction of a product sold by your salvage yard.
  • Dealer’s open lot insurance: This covers your inventory or vehicles held for sale, if applicable.
  • False pretenses insurance: This protects your business if an employee gets tricked into releasing a vehicle to someone under false pretenses.

Ask your independent insurance agent about any additional forms of coverage your salvage yard may still need.

How Much Does Salvage Yard Insurance Cost? 

The cost of salvage yard insurance can vary based on many different factors. These can include things like:

  • The size and location of your property
  • The number of employees your salvage yard has
  • Any specific operations your salvage yard completes (e.g., recycling, crushing, dismantling, sales, etc.)
  • The types and amounts of coverage your salvage yard needs

An independent insurance agent can help you find affordable auto salvage yard insurance in your area.

The Benefits of Working with an Independent Insurance Agent

An independent insurance agent can work with you one-on-one to determine the types and amounts of salvage yard insurance coverage you need. Independent insurance agents simplify the process of finding the right salvage yard insurance. 

They’ll walk you through some handpicked policy options and explain the details. Most importantly, they’ll be there for you when claim time comes. They can also help you update your business's coverage as necessary.

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