State of the Insurance Market Report

2025 Initial Outlook and 2024 Wrap-Up

Waste & Recycling

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The insurance market for waste and recycling companies continues to be challenging across most coverage lines due to limited capacity and increased claims frequency and severity. Factors such as the frequency of auto liability and physical damage claims, nuclear verdicts impacting excess liability policies, and fires at facilities caused by improper disposal of lithium batteries have led to limited capacity, double-digit rate increases, and difficult placements. Carriers require higher attachment points and often limit their capacity.

Market Conditions

The insurance market for waste and recycling companies will continue to be challenging across most coverage lines due to limited capacity and increased claims frequency and severity. Capacity and claims have been negatively impacted by:

  • Fire incidents: Surges in fire incidents have led to several challenges, including limited capacity for property coverage, significant rate increases, and larger retentions. As products containing lithium-ion batteries become more widespread, the risks at transfer and recycling facilities continue to escalate. This situation underscores the urgent need for enhanced safety protocols, better handling and disposal practices for these batteries, and increased awareness among consumers and waste management professionals to mitigate the dangers posed by hazardous materials.
  • Frequency of auto liability and physical damage claims: A nationwide driver shortage, distracted driving, more vehicles back on the roads, and increased costs to fix vehicles have led to higher claim frequency and costs.
  • Nuclear verdicts and high jury awards in the transportation industry: Plaintiff’s attorneys continue to focus their attention on trucking companies which they believe may put short-term revenue goals ahead of safety measures, such as driver training and safety technology, due to driver shortages and cost containment measures.
  • Carriers exiting the market: After several years of carriers exiting the property market for waste and recycling facilities, there is still limited insurance and reinsurance capacity due primarily to fire exposure. Fires at waste and recycling facilities are often caused by the improper disposal of lithium batteries. According to Fire Rover, a fire detection and elimination solutions firm, 2022 was the worst year for waste and recycling facility fires in the U.S. and Canada with 368 fire incidents.

Coverage Considerations

These factors have led to limited capacity, double-digit rate increases, and a very difficult market for excess liability. Carriers require higher attachment points and often limit their capacity.

With an uncertain marketplace and rising premiums, many clients are pursuing programs outside conventional insurance approaches, including high deductibles, single cell captives, and group captives.

They are increasing safety initiatives including driver training, truck cameras, and new technologies to manage the risks and costs of these programs.

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

Recommendations

With the challenging marketplace for waste and recycling companies, clients need to be presented in the most favorable light to the insurance marketplace with a focus on:

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Risk Management:
- Strengthen and showcase safety initiatives, training programs, fleet improvements, and driver hiring criteria.
- Promote the use of telematics and advanced driver-assistance systems (ADAS), which are technologies that assist drivers with the safe operation of a vehicle and showcase how this information is used for future driver coaching and training.
- Review Safety Assessment of Function and the Environment for Rehabilitation (SAFER) scores and provide a grid to show maintenance and driver safety improvements.

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Assess property conditions and make improvements.
Consider installing infrared cameras and heat detection systems to detect and identify hot spots and temperature changes that could indicate a fire before it is visible.

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Understand your environmental liability exposures and address pollution and site operations as a part of the entire insurance program.

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Analyze the costs and risks of alternative funding options and high deductible programs.

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Waste management and recycling are dynamic, risky industries that require a comprehensive approach to handling their unique liabilities.

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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.