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Property Insurance

Property Insurance

If you own property which houses a waste recycling or skip hire business and need to insure the building, its contents, plant and other bits and pieces – it’s becoming increasingly difficult to arrange affordable cover.

We’re all aware of the number of recent losses at Recycling Plants, MRF’s and Waste Transfer Stations of late – unfortunately and as rumour has it, some of these losses are biggies and have emptied the ‘coffers of insurers. As such, insurers are now back pedalling on offering cover for buildings, plant and contents. However, insurance companies in the whole are quite loyal and if you have a policy which has run for a while without losses, or the losses have been small, they’ll probably continue to invite the cover at each renewal with minimal increases in premium. If you fail to renew that policy and then come back some weeks later to renew it – it could be too late as the renewal may no longer be treated as a renewal and you may not be eligible to get cover.

What to insure?

A traditional industrial unit that’s been adapted to run as a Waste Transfer Station has many sections or parts that need insurance cover. A small waste transfer station could be in a property between £200,000 and £X million to rebuild. For example, larger operations go way beyond a £1,000,000 sum insured just for the building sum insured alone. When you add the concrete walls, the damping down system, the phones and desks amongst other contents you could be increasing this sum insured significantly. The big addition to the structure and the contents is the usually the plant that is used within the business. Shredders, excavators, trommels etc could as much as double the initial sum buildings sum insured. Business owners then usually recover an element of cover for loss of profit following an insured loss at the premises – otherwise known as a business interruption cover. Covering loss of profit through not being able to trade could run to a loss in thousands of pounds per month – particularly if you can’t grade your own waste. Straight to landfill with the skip could hit the bottom line trading profit of a business very hard.

Sums Insured – how much to insure for ?

This is a tricky one, which really only a surveyor can answer for you. Really, if you have no idea on the rebuilding cost of the buildings of your property, the only answer is to pay a surveyor to tell you. You can then accurately insure the property and in the event of a loss, a loss adjustor will not mark you down as being under insured.

Types of Cover available.

The basic levels of cover normally include Fire, Subsidence, Theft and Impact by aircraft or vehicles, Storm and Flood. Beyond these basic levels (and normally additional perils are also insured), you can opt for All Risks Cover which extends to include accidental damage to property. Historically, there’s not a lot of difference between full All Risks cover and the standard/minimum levels of cover. A bit like there’s not a lot of difference between Comprehensive and Third Party Fire and Theft on a car insurance! Be careful with cover for Glass at the property, this usually needs to be separately identified within the policy cover – glass isn’t always insured within the bricks and mortar insurance.

Flood Risks.

The environment agency have pretty much put this to bed in that they don’t want to see a load of waste swimming around following a flood from a nearby river. The pollution implications are massive, so they have tended not to permit a Waste Transfer Station to operate which is in a flood zone. However, insurers look very closely at every risk address to ensure it’s not close to a river or watercourse.

Actively Preventing Fire and Theft losses = better premiums

Insurance companies now take a very pragmatic approach to risk control. They like to see same day clearing of waste with no waste being stock piled. This greatly reduces the risk of fire. If you do need to retain waste (depending on the size of the operation), insurers like to see it stored in containers at night, in an area where if it ignites, it won’t take other waste or plant up with it. Insurers also look to see written system and controls in place which make it clear how and when this housekeeping is carried out and who is responsible within the business for making sure it’s done at the end of the working day. Insurers now also like to survey a business before cover commences, or in some cases, if they don’t get the chance to visit before policy inception they look to visit the premises very early on in the policy period to ensure their policyholders appreciate the exposure the insurers carry if a fire occurs or of plant is stolen. This in turn often leads to risk improvements to minimise loss.

How much does it all cost ?

That’s the million dollar question. The premiums can vary up and down the country substantially. Once you have prices, check out all the different cost elements associated with the policy, it could be that you could opt not to cover some parts, reducing risk to the insurer therefore lowering the premium.

Renewal Info

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