The waste and recycling industry is becoming increasingly hard to secure insurance for; most notably due to the pandemic and increased fire risk, which is particularly prevalent over summer months. Read our risk insight below to find out more about the risk management you can discuss with your waste and recycling clients to help secure insurance in this increasingly hard-to-place industry.
Why is the waste and recycling industry becoming more difficult to insure?
A rising number of fires are causing increased pressure on insurance capacity within the waste and recycling industry. There have been several high-profile fires and this increasing risk is largely due to fires caused by batteries. In a report prepared by EuRic and the WEEE Forum, they found that ‘53% of the survey’s respondents reported frequently occurring fires on a daily to weekly basis’. Although many of the fires did not require insurance pay-outs, the cost of these fires averaged at €190,000 with more severe fires averaging at €1.3 million.
In addition to this, the waste and recycling industry has suffered adversely from the pandemic as a result of reduced staffing levels. A report by the Association of Directors of Environment, Economy, Planning and Transport (ADEPT) found that 59% of authorities reported their household waste recycling centres were experiencing disruption from reduced staffing. In the same survey, authorities reported an increase in household waste – ‘95% of authorities who responded to ADEPT’s survey in the week commencing 1 March reported recycling waste tonnages to be greater than usual.’ The reduction in staffing levels and increased waste into recycling plants are contributing further to difficulties when insuring these operations.
With the effects of the pandemic and summer beginning, working closely with waste and recycling clients on their risk management is paramount to continue to secure affordable insurance for their business.
Risk management in the waste, recycling and reuse industry
Reduction in staff leading to unattended parts of the site could pose a higher fire risk, particularly in hot weather. Discuss with your clients if there have been any reductions in staff. Are there personnel present within all areas of the site and buildings? Are there dedicated fire watch personnel onsite?
As standard, facilities must be fully licenced; but with a recent increase in household waste, facilities must keep a careful eye on accepting the amount of waste they are licenced to.
Messy sites are riskier. When securing insurance, a general housekeeping statement is required that should include the condition of the building, machinery and plant used and overall appearance of the site and operations. You and your client should therefore discuss this as part of their risk management strategy.
Fire detection systems
As a key part of a client’s risk management system, commentary is required on the adequacy of existing fire alarm systems including the type of detectors, age of system etc. and your client’s fire detection systems should be in full working order and maintained on a regular basis.
RiskSure, who undertakes waste site surveys, believes that early warning fire detection should be present at all facilities where bulk storage, waste recycling and processing is undertaken. It is also our opinion that an early warning fire detection system may well become mandatory in the near future
Your client should have measures in place to deal with this type of waste and bulk storage of batteries should be in a location designed with this purpose in mind. The area should be subject to a fire risk assessment in compliance with the Regulatory Reform (Fire Safety) Order 2005 (or equivalent) and in compliance with the DSEAR Regulations to ensure that it is remote from identified hazard zones.
Fire protection measures for battery storage areas should be proportionate to the risk and be based on the findings of the fire risk assessment. Battery charging and storage areas should be protected by automatic fire detection and alarm installations and be designed, installed, and maintained by an accredited engineer. The installation of automatic fixed fire suppression systems is strongly recommended in areas where batteries are stored, especially where lithium-ion and lithium polymer batteries are stored in bulk.
- Dust management
Waste and recycling sites produce large amounts of dust which can build around the plant and areas of buildings, e.g. beams, and can pose a fire risk. One method of risk management is to install venting and extraction solutions to help mitigate dust build-up.
Stockpile arrangements should be consistent with the capability of the plant i.e., tonnes in/tonnes out capacity. An effective risk management action is to separate waste in conformant waste bunker/bays as this helps reduce fire risk.
Clients must be mindful of stack arrangements and compliant to the latest guidance with fire separation between each stack. Speak to your clients about loose stock storage and positioning. How many meters is stock from buildings and boundary fencing? In hot seasons, it is recommended that temperature probes or similar are used for stockpiles and that they are dampened down at regular intervals to reduce fire risk.
To manage risk effectively, it is recommended that combustible material is stored away from fixed machinery and plant, or suitable fire breaks are present. Speak to clients about their site diary and the inclusion of details of how their machinery and plant run in isolation. In hot weather, do your clients check stock temperature with probes? Do they cool down stock? Do they have water supply and a hose reel available throughout the building/site?
Shut Down Procedures
Clients should be vigilant, ensuring their Shut Down Procedures are adhered to. Shut Down Procedures may involve clearing down all contents and removing waste from in and around the facility of the plant. They may also include an end of day walk round site fire watch. It’s advisable that these be logged and included in a site diary.
- Last time of acceptance
When securing insurance, this must be discussed as part of your clients risk management strategy. This is due to the fire risk posed by waste that is accepted and not sorted through at the end of the day. Any late incoming materials could be quarantined, or early warning detection systems could be used such as thermal probes and thermal imaging. Different insurers have different requirements; however, it is advised that the process is included within your client’s site diary.
Vehicle and plant maintenance
Discuss with clients their vehicle and plant maintenance, as a maintained piece of plant is much less risky, particularly conveyors and machines with moving parts.
How we can help
Working with a London Market broker who understands the industry, its exposures, and the benefits of risk management is key.
Miles Smith have been working with the waste, recycling and re-use industry for many years and continually develop an offering suited to the needs of businesses operating within this industry.
We work closely with our brokers and their clients, providing specialist products and risk management advice. This, combined with many years of expertise, allows us to help businesses operating in the industry manage the risks they face.
Once insurance is secured, we highly recommend attending your client’s site survey. Attendance of site surveys can help significantly with the ease of the process. If a broker does not attend, things may get lost in translation and, as a part of the terms and conditions of the policy, it is key that the survey is done.