Along with many other industries the waste and recycling sector faces challenges with obtaining insurance cover and increases in premium rates. These conditions are general for all businesses but there are some strategies that can improve the cover and the terms you can obtain. Mark Bramley, Newcastle Area Director at Gallagher, provided key guidance to WCRA NSW at a recent NSW workshop and here we share the highlights.
Realistically, businesses should be prepared for premium increases of at least 10‒15%. This is due to a number of factors. Claims for natural disasters have eaten into the pool of funds reserved for paying claims, with the result that insurers’ profits have more than halved.
The recent fires, cyclones and storms have inflated claims for damaged buildings and plant, while liability in all areas: management, including company boards and executives; third party injuries and workplace health and safety; and the legal costs involved have also contributed to the cost of claims. Further, in recent years the waste management sector has had to deal with several very large fires.
From the insurer perspective property damage and business interruption top the risky exposures list, followed by management and public liability, employment liability, equipment breakdown and cyber security breaches.
In addition, access to insurers has reduced both in Australia and overseas as the same issues affecting the waste and recycling business sector are being experienced globally.
As a result all businesses should be prepared for ongoing premium increases for property cover, challenges in obtaining full capacity of protection with higher excesses being applied and increased scrutiny on liability cover.
What can waste and recycling business owners do to improve their insurance cover?
How can waste and recycling business owners obtain the insurance cover needed and keep a lid on premium costs? Here are some tips for preparing in advance of insurance application or renewal.
General risk maintenance: compliance with the NSW fire safety in waste facilities guidelines and Management and storage of combustible recyclable and waste materials guidelines are steps you can take to reduce property risks.
- Ensuring that all workers are suitably trained in the policies and procedures of the business along with ongoing training around risks.
- Ensuring that all machinery, equipment and vehicles are used and maintained in accordance, with the requirements of the manufacturer.
- Ensuring that all conditions of licenses and consents are complied with.
- Ensuring security protections are adequate and properly maintained, and that combustible materials are dealt with appropriately.
- Engaging risk management specialists to conduct site inspections and analysis helps identify exposures that you may have overlooked.
- Timely completion of risk management recommendations and documented evidence that you have carried these out by approved suppliers will help improve your risk profile with insurers.
- If your bottom line capital supports it, you may benefit from increasing your excess/deductibles to reduce your premium by having the business take on some added risk.
- Ensure you’re not selling yourself short, regularly review your sums insured amounts to ensure they are current with repair or replacement costs as the last thing you need is to be under insured.
- Ensure your documented business activities truly reflect your operations provided to your insurers because omissions or misrepresentations could cause claims to be denied.
- Consider what you claim. Consider whether it’s worth claiming small claims just above excess. Large claims will impact renewal premium and acceptance. Similarly with multiple claims for the same event or type of risk.
- Stay connected to your industry association as they are a valuable partner and help provide guidance and advocate for your industry.
- Use an insurance broker who knows the industry, the challenges and markets available. That way you’re more likely to get value for money and the optimal terms achievable for your business.
How we can help
Our waste and recycling industry insurance experts can assist with a risk assessment of your operations and recommendations to help improve you present your case to insurers.
We can also conduct a no-obligation review of your current insurance arrangements and make recommendations for improving your cover and containing your costs.
Originally published in Inside Waste magazine on behalf of Waste Contractors and Recyclers Association of NSW (WCRA)
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient’s industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers’ control.
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