Recycling centers range in size from the small electronics storefront in a strip mall to the big metal recycler that crushes cars. And they all need insurance.

From general liability exposures to environmental-specific ones like potential contamination of the site or materials, insuring recycling centers involves a complicated web of out-of-the-box risks that requires an expert partner to adequately address.

That’s where you come in.

Pricing Trends

Nailing down trends for recycling centers is tricky since they often involve a combination of both general and environmental liability—meaning pricing tends to follow specific programs on an individual basis. According to David Dybdahl, president of ARMR.net, pricing for recyclers is stable. “That market is fairly mature,” he says. “We’re not seeing big changes.”

“We continue to see a stable market with increases from a rate perspective,” agrees Matt Gartner, an underwriter at XL Group who serves on the board of NORA, an association representing recyclers that work with oil, antifreeze and other liquids. “What will dictate that change as far as rate is really the individual’s experience.”

That’s because working in the recycling industry isn’t exactly an office job. “The refuse and recycling collection industry is consistently in the top 10 most dangerous jobs,” Gartner explains. “Because of that, [each client’s] own experience dictates what they pay and where they buy as opposed to a general market trend.”

It also means nobody’s fighting over the business. “The market of who sells to this industry is a pretty small universe,” Gartner says. “If you’re a trucking firm or a construction company or a manufacturer, there are dozens of insurance companies you can buy insurance from. When you run a landfill or a material recovery facility or a transfer station, that market really starts to narrow.”

On the Horizon

But there’s a lot of money in the recycling business, and that attracts a lot of dabblers. As a result, don’t expect policy variation to go away anytime soon. “The policies are not standardized,” Dybdahl says. “As new entrants into the environmental space introduce their non-regulated product lines, we find more customized insurance policies that do not adhere to any industry standard.”

For the uninformed agent, it can be difficult to distinguish coverage variations between insurance companies—and that can be hazardous from a professional liability standpoint.

As “recycling continues to increase,” Gartner says, keep an eye on activity around organic waste composting—the class will wreak plenty of conflict. “Anywhere from 30-40% of volume in organic waste composting is food waste,” Gartner explains. “One of the concerns with food waste is odor. As much as everybody feels it’s a good thing to recycle it as opposed to disposing of it, nobody wants the odor down the street.”

And it will come as no surprise that e-waste—computers, televisions and other electronics—will only become a bigger concern for recycling and waste facilities moving forward. “With that, the biggest exposure people face is their data,” says Gartner, who helped develop an electronic data destruction coverage form specifically for the recycling industry. “When you destroy computers, what’s on the computer? Whatever you throw out, somebody else is going to find it.”

For a more in-depth look at the ins and outs of the recycling center business and how your agency can approach these complex policies, keep an eye on IAmagazine.com and next week’s edition of the Markets Pulse e-newsletter.

Jacquelyn Connelly is IA senior editor.