Scrap Insurance

Why scrap insurance is needed

Millions of tonnes of metal are recycled each year and scrap dealerships play an important part in that cycle, but scrap businesses face risks just like any other industry, such as financial losses if something goes wrong.

Scrap metal insurance is designed to protect against the unknown, for example, compensation if there is an incident that causes damage to your business premises or to equipment, machinery or tools that are essential for your business to run.

Insurance can also cover you if one of your employees or a member of the public has an injury that happened in your scrapyard or as a result of your business activities, or if there is theft of your stock.

Scrap insurance policies will be tailored to suit your dealership and can be scaled up or scaled down to appropriately match your day-to-day operations.

Your insurance policy can be compiled of a variety of cover:

Insurance whilst you are on the road

• Van insurance: Firstly, if you're operating a van then you'll need to have a commercial van insurance policy in place. Be sure to check all the terms and conditions on standard van policies, which may not cover large vehicles, heavy goods vehicles (HGVs), or unusual vehicles like caged vans or tipper trucks.
• Towing and heavy loads: You may be required to seek out a specialist insurance policy if you will be towing more than 7.5 tonnes, or collecting scrap metal in a vehicle over this weight.
• Road risk: Like with any motor industry cover, if you or your employees will be operating vehicles that don't belong to your business, all named drivers will need to be covered by road risk insurance. Although most metal you collect will be scrap and not be roadworthy, it's a good idea to have road risk insurance in case you are asked to collect a Category N write-off vehicle. For example, a car that has been written off by an insurance company after sustaining damage that is purely cosmetic, but runs fine.

Protecting your tools, goods and business premises

• Business premises: Just like any company, it's important to consider taking out insurance for your business premises, including any office buildings, scrap yards or storage units that you are responsible for, so these are insured against unfortunate events like damage and destruction from fires, floods, theft and vandalism.
• Tools and equipment: You can take out insurance that provides cover for the tools, specialist equipment and machinery that you and your employees use on your scrap yard or out on the road.
• Goods in transit: It's also a good idea to organise insurance cover for the goods that you are transporting. This would ensure that scrap you pick up and transport back to your yard or elsewhere is covered whilst you are making those journeys. With this type of insurance in place, your business would be reimbursed for loss or damage of items whilst in transit.

Liability cover

• Employers' liability cover: If you employ people, whether these are full-time, part-time or casual staff, you'll need to take out employers' liability insurance, by law. This provides cover for your business in case an employee is injured at work, and if an employee claims against your business or requires compensation.
• Public liability cover: Similar to employers' liability cover, public liability cover will help you pay for legal fees and compensation if a claim is brought against you by a member of the public. This type of cover is in place to protect your business if someone gets into an accident at your scrapyard or is injured because of your business activities.
• Product liability cover: You might also want to take out product liability cover, particularly as you will be dealing with scrap parts that you may not be able to vouch for. Product liability insurance provides covers in case a part you sell, such as a vehicle component, turns out to be faulty.

How to lower the cost of your scrap metal insurance

There are some helpful tricks for encouraging cheaper scrap metal coverage, which can be quick and easy to implement. For example:

• Consider paying for an entire year's worth of insurance cover in one go, instead of splitting your payments into monthly fees. Most insurers will provide a discount for a bulk payment up-front. Plus, it removes any risk of your business racking up late payment fees or interest charges. You can also encourage cheaper insurance if you opt to pay higher voluntary excess if you did need to make a claim.
• Think carefully about which employees you include for specific coverage within your policy. For example, if you are taking out road risk insurance or commercial vehicle cover and will be adding a few staff members as named drivers, choose the employees who are sensible and safe on the roads. If your named drivers have clean driving licenses and are at an age and experience level that makes them less risky to insure, your quotes will be lower.
• Add additional layers of security to your scrapyard to make it as safe as possible. By installing security measures such as alarms, CCTV, sufficient locking systems, and parking vehicles in locked garages overnight, you can discourage thieves, vandals or trespassers from trying to enter your breaker's yard. Without safety measures in place, the insurance provider might see your business premises as high risk. Adding security features lowers the risk, which encourages them to offer you a cheaper deal.

To find the cheapest deals for scrap dealer insurance, you should compare policies using Utility Saving Expert.

Add a few details about your business and insurance needs, then our online comparison tool will work instantly to generate insurance policies that offer the best value for money for your business.

Browse through the results to find a policy that suits you from an insurance provider with a high customer satisfaction rating, add on any extra layers of insurance that you require, and finalise your new insurance deal directly from UtilitySavingExpert.com.