In waste management, the rules, technology and demand keeps changing. What never seems to change is the rising cost of risk faced by waste haulers, recyclers, and waste disposal and reclamation facilities. Insurance can shield your assets from claims due to accidents, weather, cyberattacks, and other risks. Many jurisdictions also require surety bonds.
Commercial auto insurance for waste management companies
Probably the costliest insurance most waste haulers and recyclers face is commercial auto insurance. Premiums have been on the rise for years due to high-severity claims and the frequency of accidents. Costs are especially hard on those with a history of accidents.
The collision side of your commercial auto policy helps pay to repair your vehicles if they are in an accident, while comprehensive insurance covers damage caused by hail, flooding, theft, vandalism, and crush or strike damage that occurs outside a collision.
The liability side of your commercial auto policy helps pay for costs for which you are deemed responsible after an accident, including injury to others or damage to their property. It covers both collision injury and harm caused to non-employees while in the process of collection and disposal.
You can get commercial auto insurance on a fleet basis, which covers all your company’s vehicles, including trucks, pickups, box vans, and passenger automobiles. Note that many insurance companies are now requiring the implementation of “telematics” — that is, on-board cameras, GPS and other monitoring technologies — as preventive measures and for post-claim payments.
Property insurance for waste management companies
From equipment to buildings, your waste management operation relies on the accessibility and functionality of your property. Here are some of the most common property insurance needs for waste management companies.
Building and contents insurance
Fires, windstorms, explosions and vandalism can all cripple your waste management operations. Commercial property insurance can help pay for damaged structures as well as damaged or stolen building contents. It can also be written to help with business income and extra expense coverage should a covered peril shut down your operations. This protection, also called business interruption insurance, can be tailored to particular external perils as well, such as supply chain interruptions or utility failures. Talk to your insurance agent or broker about your vulnerability in these areas to see whether such expanded coverage is right for you.
Equipment breakdown insurance
Balers, compactors, shredders, crushers, grinders, conveyors — the list of equipment waste managers rely on is lengthy. Equipment breakdown insurance helps with the repair or replacement of machines that fail due to issues outside of wear and tear. It can also help continue cash flow if your business is shut down due to an equipment malfunction.
Mobile equipment insurance
If you use excavators, skid steers, or other outdoor vehicles that are not meant for use on public roads, coverage outside of commercial auto is necessary. Protection for such equipment is typically offered on an equipment floater for mechanized or self-propelled off-road vehicles. You can usually combine all sorts of equipment under a single policy, even across locations.
Liability insurance for waste management companies
Waste haulers, landfills, recyclers and hazardous materials handlers face numerous and serious liability risks. Each has a corresponding insurance line that offers financial protection should you face a costly event. Here are the most common:
General liability
This is the most basic of liability policies. It covers injuries to people who visit your work campus as well as off-site injuries or damages to others that your staff or equipment are responsible for, not including auto accidents. Before you can start providing services, the municipality or commercial client will require a detailed “Hold Harmless” agreement in their contracts. Due to escalating jury verdicts, they are increasingly stipulating high liability limits—often $5 million or more. This means that you may have to obtain a commercial umbrella policy over your base general liability insurance policy in order to fulfill the contract.
Environmental and pollution liability
One of the biggest liability risks is a complaint that you mishandled waste and caused an environmental or pollution problem. That could include air pollution from an incinerator or fire; a toxic chemical release from recycling, landfill or hazmat handling; fuel seepage; or another event that poisons or damages the land, air or water. Environmental or pollution liability insurance will help with investigation costs, legal defense and the payment of settlements or damage awards. It may even have a crisis response clause that assists with public relations. Cleanup, debris removal and restoration of the affected area are potential benefits that you might ask to have included if your sector of the industry merits such protections. Because standard general liability policies exclude pollution liability, this is an essential endorsement for your policy to include.
Employment practices liability
Complaints of hostile or unfair workplace practices exist in every industry with accusations of discrimination, illicit hiring or firing practices, or workplace harassment. If taken to a lawyer or the Equal Employment Opportunity Commission, these complaints can turn into expensive lawsuits or regulatory actions. An employment practices liability insurance (EPLI) policy can help with legal costs and payouts to plaintiffs as well as investigation and regulatory response costs. Note that regulatory penalties might not be included in your coverage.
Directors and officers (D&O) liability insurance
For those who have investors or shareholders of any kind, D&O insurance can protect the assets of your company and the personal assets of your executives and board of directors. In general, it can cover legal fees, investigation costs and payments for fiduciary and oversight failures.
Understand the Cyber Threat
The waste management industry is increasingly reliant on internet-enabled technology. From web-based payments to partner communications, route scheduling and operation of machinery, you have multiple layers of cyber risk stemming from internet-connected and cloud-based systems. There are two sides of cyber insurance that can help: first-party and third-party.
First-party cyber insurance steps in if your systems are disabled or your data are ransomed. It can help pay to restore operations, investigate the cause or source of the problem, and supply a flow of cash if the attack shutters your business for an extended period.
Third-party cyber insurance helps pay what you owe if your IT security fails and customer or partner data is leaked to the victim’s financial detriment. It can cover notification costs, media and customer relations, and ongoing monitoring needed to identify fraudulent use of the stolen data.
Workers compensation insurance for waste management companies
Employee injury is a top concern. Crush and puncture wounds are common as are motor vehicle injuries. In some sectors of the waste management industry, especially in sewage, hazmat and medical refuse disposal, illness is also a big risk. Workers compensation insurance requirements and benefits vary by state, but all waste management enterprises are smart to carry it. Workers comp insurance can not only pay for medical care and rehab of harmed employees but it can also prevent liability lawsuits against your company over such incidents.
Surety bonds for waste management companies
Multiple kinds of waste management bonds are available and may be required, depending on the sector of the industry. For example, landfills and waste haulers are often required by their state or municipality to carry surety bonds as part of their licensing qualifications. If you have a pollution incident, you may be required to get a corrective action bond. Even salvage yards and some recycling companies may need a surety bond.
The surety (the company providing the bond) will need a lot of information about the financial health of your firm, along with your time in business, leadership, and current contracts. Good credit and strong leadership and performance make it easier for you to secure surety bonds.
Partner with your independent agent
Since several of the coverages waste management companies need are fairly complex — some even requiring specialty policies or surety bonds —using an independent insurance agent or broker with knowledge of the waste management industry can help outline your options and. You may find, for example, that some of the liability policies on offer don’t have high enough coverage and, as a result, you need layered insurance (from multiple companies) or excess liability or umbrella insurance, which increase the dollar amount of your protection. Find a waste management insurance agent near you who can help with these complex matters.