Reasons Why You Need Scrap Metal Dealers Insurance
The world of recycling depends on scrap metal businesses to locate, gather and deliver scrap metal for further use and recycling process. By operating a scrap metal business, one can make a positive impact on the environment and maybe turn a decent profit. Below we’ll share why scrap metal dealers insurance has a key role to play in business protection for this industry.
However, this job has its bad sides as well. That’s because scrap metal, especially metal poles and aluminum siding, can turn into projectiles if not tied down. Larger operations may need trucks as well as a land to store and separate loads of metal objects. Larger construction equipment, such as a backhoe, can be of a great help to a larger scrap metal operation.
For some, the excitement of finding metal treasures fuels them, while others like the idea of making a profit from garbage. Either way, it’s a good idea to start the business properly.
That said, it’s always a good idea to obtain necessary licenses, permits and insurance. Unfortunately, scrap metal dealers have always had issues with insurance as most insurance brokers find the industries difficult to accommodate.
Driver travel off-site to pick up metal and employees operate heavy machinery to prepare an inventory for delivery to a foundry. With so much going on, having the right insurance solution can help protect your operation and keep it moving in a case of a loss.
Even more, your holding area must be safe for both employees and customers. This may mean ensuring metals are not stacked too high and that nothing sharp is sticking out. Because of the high potential for injury, make sure you are fully insured for all eventualities and check your underwriting carefully to see what’s covered and what isn’t covered by your Scrap Metal Dealers Insurance.
You will need employer’s liability insurance when hiring staff and you may wish to approach a specialist insurer with experience in your industry due to the high-risk of staff injury that comes with the job. For example, you may have insured your scrap metal business for $50,000 when you first bought it. Five years later, your scrap metal business location and equipment may cost $100,000 to rebuild. That’s a $50,000 gap in coverage – which actually could leave your business without the proper insurance to rebuild in the case of a loss.
Many scrap metal dealers purchase an insurance policy when they first move in, but they may not understand the importance of periodically reviewing it or reassessing their needs. It’s an oversight that can ultimately lead to a gap in their coverage.
If you have a location/site that is open to the general public, you’ll always have to cover these liability issues. That said, at least, have your customers always sign liability agreement before entering your scrap metal site. Actually, your coverage can help protect customers while they are at your location, your vehicles and equipment. That’s why you’ll need the following coverages:
- Commercial auto insurance
- General liability
- Inland marine
- Property insurance
- Specialized coverage for equipment and machinery
As scrap metal businesses are exposed to industry-specific risks, you’ll need to look for an insurance company that understands those risks and what it takes to keep your business protected. Since most likely you own a lot of equipment including heavy machinery and trucks, you’ll need a specialized coverage for your equipment and trucks. Additionally, if you have a robbery, burglary or other loss, you will need documentation to prove your claim to the insurance company. You can always ask your insurance agent what is needed. Keep in mind that scrap metal locations are always a target by robbers who are looking for expensive metals. In other words, you’ll need a scrap metal dealers insurance policy that covers these services.