Insurance

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WasteAdvantage
The Advantage in the Waste Industry

Key Insurance Factors to Consider

Linda Addison

A thorough knowledge of insurance coverages you may need is important. Asking questions And getting Answers you cAn understAnd Are key to getting the right protection for your compAny.

Moving towards sustainability in our culture requires social and economic challenges that influence our everyday lives. Our efforts toward ethical consumerism have helped fuel the increase of the recycling industry. The subsequent growth of the industry results in more risks for recyclers that must be addressed. This article will help identify some of those risks and issues that you should consider before working with an insurance agent or broker to protect your business. Some of the factors that must be considered by recyclers and waste haulers are: Origination. Recyclers and waste haulers now must consider that there is very little sorting going on at a local level. Transportation. There may be more travel involved with the disposal of waste. Most of the materials to be recycled are being consolidated and sorted and then shipped later along with other shipments. In many cases, refuse is being transported to ports and more overseas shipping is involved. Ports. More often, shipping ports are involved in the disposal of waste. We are running out of space in the U.S. and, consequently, shipping more waste materials overseas. There is added exposure whenever a shipping dock is involved. Both the dropping off and the picking up of the waste involves movement of the material and thus more risk. Content. There is also an increase in discarded electronics. Much of this waste is finding its way to China. By dismantling and reusing some materials, China helps to control the cost of finished goods for exports. Because some of the materials involved in electronics may be hazardous, there can be an additional risk, and therefore additional cost, to transport these materials. Change of authority. The process of waste hauling and insuring that activity becomes more complex as the responsible parties change. In this case,

owner-operators of tractor trailers responsible for the hauling of waste must understand the risks involved and be aware of any liabilities that incur in the process.

Getting Insurance for Your Business

At one time, finding insurance was difficult. Now, its less so, given the number of competitors in the market. So while it may be easier to get insurance for your recycling business, owners and risk managers must be more cognizant of the underwriting data that helps determine the cost of your insurance coverage. While you certainly want to pay a reasonable rate of coverage, you also want to have faith that should an incident occur, it will trigger a reasonable claims response rather than a denial of benefits. Knowing what you are insuring and what the consequences are of any adjustments your insurance broker may be making in order to save you money, can have significant results.

The Marketplace
Companies that were involved in recycling at the dawn of the industry may not have had many options when it came to insuring their firm. Insurance companies were still learning much about the industry and many were reluctant to get into a field of so many unknowns. Now, however, as insurance companies have had financial success protecting the recycling industry, more companies want a piece of that pie. While a competitive marketplace helps to bring down pricing, it also puts the burden of knowledge in the hands of the consumer.

Historical Perspective
As with any industry, the longer you are involved in the business, the more experience and knowledge you acquire. This historical information is important in evaluating a firms need for coverage. Data collected by insurance companies over time, can be analyzed to determine trends. This trend data can then be used

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Key insurance Factors to consider

to determine exactly what the risk factors are for insuring a recycling business. Some of the information that is important to insurance carriers includes: Driver data. Have drivers been trained properly? Are drivers re-trained at periodic intervals? Equipment maintenance procedures. Is there a maintenance schedule in place and is it consistently followed? Loss control. Are there loss control practices in place? Are risk management practices reviewed periodically? Insured firms can cut costs by improving their risk management practices. Claims frequency and loss history. Previous performance is often indicative of future performance. Keeping claims frequency under control and initiating practices that will improve performance are key factors in determining your coverage costs. Mandatory requirements. What are the specific laws for each state or locality?

Choosing the Right Agent

Finding an experienced and knowledgeable insurance agent can be one of the most important steps recycling companies take in protecting their firms. The insurance agent or broker for your company should be specifically trained in the waste industry or working with an entity that is. Your agent or broker should have a good idea of how much experience the insurance company has that you are considering as your carrier. A thorough knowledge of the coverages you may need is also important. They should also be able to read and discuss the policies under consideration. Asking questions and getting answers you can understand are key to getting the right protection for your company. By working with your insurance agent or broker, you will be able to determine the right balance between costs and service, know-how and protection for your company. | WA Linda Addison is Manager of theWaste and General Casualty Divisions for 5 Star Specialty Programs, a Division of Crump Insurance Services, Inc. (Melbourne, FL). She heads the Waste Division and Business Auto Program and has more than 30 years of insurance expertise, mostly in the transportation, trucking and public auto sectors. Her experience has been on the agency and underwriting side of the business. Linda can be reached at (321) 421-6758, via e-mail at linda.addison@5starsp.com or visit www.5StarSP.com.

2012 Waste Advantage Magazine, All Rights Reserved. Reprinted from Waste Advantage Magazine. Contents cannot be reprinted without permission from the publisher.

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WasteAdvantage Magazine

January 2012