State of the Insurance Market Report:
2025 Outlook

Waste & Recycling

The insurance market for waste and recycling companies continues to be challenging across most coverage lines due to limited capacity and rising claims frequency and severity.

Factors such as increased auto liability and physical damage claims, nuclear verdicts impacting excess liability policies, and fires at facilities caused by improper disposal of lithium-ion batteries have led to restricted capacity, double-digit rate increases, and difficult placements. Insurers require higher attachment points and frequently limit their capacity.

Market Conditions

 

The waste and recycling insurance market continues to face significant challenges due to:

  • Fire incidents: The rise in facility fires has resulted in limited capacity for property coverage, substantial rate increases, and higher retentions. With the growing prevalence of lithium-ion batteries in consumer products, the risks at transfer and recycling facilities continue to escalate. This highlights the need for enhanced safety protocols, improved battery disposal practices and increased awareness among consumers and waste management professionals.
  • Auto liability and physical damage claims: A nationwide driver shortage, distracted driving, more vehicles back on the roads, and increased vehicle repair costs have contributed to higher premiums.
  • Nuclear verdicts and high jury awards: Plaintiff attorneys continue to target trucking companies alleging that cost-cutting measures and lack of training compromise safety. As a result, insurers are tightening their underwriting criteria for auto liability and excess liability.
  • Carrier exits from the market: After years of insurers withdrawing from the property market for waste and recycling facilities, capacity remains limited, particularly due to fire exposure. Fires at waste and recycling facilities are often caused by the improper disposal of lithium-ion batteries. According to Fire Rover, a fire detection and elimination solutions firm, in 2024, we saw the highest level of fire incidents since they began tracking them in February 2016. 2022 was the worst year for waste and recycling facility fires in the U.S. and Canada with 368 fire incidents.

Coverage Considerations

 

Given these market pressures, waste and recycling companies are facing:

  • Limited capacity and higher premiums across multiple lines
  • More difficult placements, particularly for property and excess liability
  • Higher attachment points and stricter underwriting requirements
  • A growing interest in alternative risk transfer strategies, such as high deductibles, single cell captives and group captives.

Waste and Recycling Rate Forecast

 
Rate Forecast
Waste and Recycling: Auto +10% to +30%
Waste and Recycling: Excess +10% to +40%
Waste and Recycling: Property +10% to +75%

Recommendations

 

To navigate these challenges, and present in the best possible light to insurers, companies should consider the following:

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Strengthen safety and risk management initiatives: Use enhanced driver training programs, hiring criteria, and fleet safety measures. Additionally, implement telematics and advanced driver-assistance systems (ADAS), to monitor driver behavior and support ongoing training.

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Use safety assessment of function and the environment for rehabilitation (SAFER) scores: Regularly review SAFER scores and document improvements in maintenance and driver safety.

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Improve property conditions: Invest in fire prevention technologies such as infrared cameras and heat detection systems to detect and identify fire risks before they become visible.

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Mitigate environmental liability risks: Address pollution exposures and incorporate environmental risk management into overall insurance strategy.

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Explore alternative insurance solutions: Assess the cost-effectiveness of high deductible programs, single-cell captives, and group captives.

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Add risk management controls: Implement additional controls to support alternative risk programs.

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The contents of this report are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.