Insurance in the Waste Management Industry – Past, Present & Future

The Past
The waste industry used to be viewed as high risk due to a historical lack of Health & Safety and the often dangerous environment. Insurers controlled premium levels for the waste industry due to the limited panel of insurers that were prepared to offer cover. Material damage claims were considered `odds-on’ as the perception was that there was poor management, combustible materials stored, bad housekeeping and often open sites due to a lack of security. Waste, recycling, scrap metal, waste paper, waste plastics etc were all trades included on most insurers decline lists.
The Present
Since the dark days of 2002, the market has come full circle with some insurers looking to obtain business at virtually any price. Waste companies have moved up the list from `decline’ to `acceptable’ and from this to, quite recently TARGET BUSINESS!
It is widely accepted within the insurance industry that we are now in a “soft market”, meaning insurance companies are fighting for business and are reducing premiums to attract new clients.
This culminated recently with a move by “household name” insurance companies into waste insurance. The perception being that Health & Safety in the industry is much better than it was previously and that companies are far more professionally operated. Capacity in the market has allowed insurers to take on business they would have previously declined, but still, the companies that keep claiming experience high premiums and excesses.
Also, some Insurers are looking to provide all covers for companies rather than just, say, fleet or liability in isolation – they are looking to package the insurances and therefore make it more difficult to attack from other insurers by making each cover dependent on the other. Health & Safety consultants are offering free reviews to try and get in with waste companies and insurance companies have set up divisions to provide non-insurance income, i.e. fixed electrical inspections, Health & Safety, human resources assistance etc.
There are some sectors within the waste industry that are still not wanted by virtually all underwriters – i.e. asbestos. Of late, some of the fringe markets have become more mercurial in respect of premiums and stricter on policy terms – some believe this indicates a hardening of attitude?
The Future?
If the market does harden we could see the following:-
• Fringe insurers dropping out of the market with little or no notice.
• Reluctance of the mainstream insurers to take on companies previously insured with fringe players – it seems strange but it’s happened before.
• Rates and minimum premiums increasing
• The pro-forma submitting of Health & Safety policies and other documentation before a quotation is provided.
• Pre-quote surveys at the proposers expense.
• Higher Third Party Property Damage / Third Party Bodily Injury and even Employers Liability excesses
• Co-insurance clauses meaning the policyholder could pay the first 25% of a fire, theft or malicious damage claim to their premises
• Better awareness of the actual personal liability of directors increases the purchase of directors & officers cover in the industry
However…
In the future, as the industry grows, the current levels of insurers offering cover could double, increasing competitiveness. If you’ve been insured with the same insurer for some time, at next renewal, it could be worth checking around to make sure you are still getting the best deal.
As we are now probably reaching the lowest point in the current “premium cycle”, it is likely that premiums will level out over the next few years and then possibly start to increase again – unless the cost of claims are controlled. If you are able to effectively put in place procedures now, which limit the frequency and cost of claims, premiums could remain favourable for many years to come. If you can prove that your workforce is “safety aware”, and as a consequence, remain a claim free risk, your insurers should continue to provide you with reasonable premium levels.
If you’d like further information on insurance in the waste management industry. Fax your request through to us on 0844 560 1082 or leave a comment below containing your contact name, company name, postal address, email address and phone number.
This article originally appeared in Issue 19 of The Skip magazine