What Types of Insurance Does a Junk Removal Business Need?
A junk removal business offers extra assistance in getting rid of unwanted items. This service can be beneficial for removing large, bulky, and hard-to-dispose-of items. Many customers are willing to pay the extra cost to get rid of unwanted items, making junk removal businesses profitable and sought after.
What Are Some Risks for a Junk Removal Business?
A junk removal business assumes several liabilities when removing items from a customer’s location. Injuries could occur, or hazardous substances could leak. As a result, good insurance with generous coverage is essential to protect the business from expensive lawsuits and losses. Some of the risks that a junk removal business may encounter include the following:
- Car accidents
- Employee injuries
- Customer injuries
- Improper disposal
Junk removal businesses operate by picking up items from various locations. For this reason, employees are regularly on the road in vehicles. Frequent driving puts the business at risk of liabilities from at-fault accidents and damage to expensive business-owned vehicles.
Accidents occur for many reasons. The more common causes include driving in unfamiliar locations, poor visibility, driver fatigue, distracted driving, and traffic. In addition, junk removal employees will likely drive large vehicles and tow trailers, increasing the risk of accidents due to the complicated nature of operating large vehicles. Further, large loads can mean a vehicle overturn, especially when the load is overfilled or unbalanced.
Junk removal businesses own various vehicles, such as trucks, box trucks, tow trucks, trailers, and dumpsters. Often, their vehicles are customized and expensive to replace. So, any physical damage (collisions, weather events, theft, etc.) poses a financial threat to the business.
Employees are at risk of several injuries while removing junk and operating heavy equipment. Some of the main concerns are muscle strains and back injuries from lifting heavy items. Other physical injuries include cuts, crushed limbs, and pinched fingers or toes.
Another employee health risk is exposure to toxic materials. Sometimes, the business’s employees may be required to work in unsanitary or hazardous areas, contributing to an increased risk of illness or injury. Toxic materials put employees in danger of respiratory harm and skin or eye irritation.
Incidents of customer injury or harm will primarily occur off-site at the customer’s location. Customers are at risk of similar injuries to employees, particularly if the customer attempts to help with the junk removal. Usually, an injury occurs during the removal process and includes hazards such as falling, heavy, or sharp objects.
Moreover, a customer’s property is also at risk of harm during junk removal. For instance, poor maneuvering of bulky or heavy items risks damaging walls, floors, stairs, and other furniture. Also, backing in dumpsters or trucks can cause property damage to structures, driveways, fences, and landscaping.
Junk removal businesses take responsibility for the items they dispose of, so if a hazardous substance leaks and damages the environment, the business could be held liable. Spills can occur during loading, transport, storage, and disposal. Some items that are more likely to be an environmental hazard include AC units, refrigerators, aerosols, materials with asbestos, paints, oils, and tires.
What Types of Insurance Policies Should a Junk Removal Business Consider?
Given the amount of risk that a junk removal business is exposed to, it is vital to have insurance policies that cover each risk. Some of the policies that will help cover a junk removal business’s risks include the following:
- Commercial automobile insurance
- Workers’ compensation insurance
- General liability insurance
- Environmental impairment liability insurance
Commercial Automobile Insurance
A commercial auto insurance policy covers two primary exposures involving the business’s vehicles: liability and physical damage. First, the policy covers liabilities caused by an at-fault accident, such as bodily injury and property damage. Second, the policy insures business-owned vehicles for physical damage. Auto insurance is essential because a junk removal business has employees on the road daily, and its vehicles are typically high-value, hard-to-replace vehicles.
Typically, physical damage coverage protects vehicles up to their value at the time of loss, minus any deductibles. It also covers the vehicles against numerous hazards, including
- Wind or hail
- Falling objects
Workers’ Compensation Insurance
A workers’ compensation policy offers coverage for employee injuries. For instance, if an employee is injured, they may accrue costly medical bills and be unable to work. As a result, a work injury puts employees at risk of financial hardship and the business at risk of a lawsuit.
In covering the employee, the business is also protected from potential lawsuits. Fortunately, a workers’ compensation policy offers coverage for an employee’s expenses. For example, a workers’ compensation policy covers
- Medical costs
- Lost wages
- Rehabilitation care
- Disability income
- Funeral expenses
If your business uses contractors, you will want to verify they have their own insurance, otherwise, your business may be on the hook if they get injured while on the job.
General Liability Insurance
General liability coverage for premises and operations offers coverage for bodily injury or property damage claims due to the junk removal business’s actions (aka, operations). So, if the business’s employees damage a client’s door frame while trying to remove a large sofa, a general liability policy could cover the property damage claim. Similarly, the policy covers customer or bystander injuries resulting from the business’s actions.
Although there may only be a small exposure for on-site injuries, the general liability insurance policy will also cover those types of claims. For example, the policy protects the business when a customer slips and injures themselves at the business office.
Environmental Impairment Liability Insurance
An environmental impairment liability policy offers coverage for claims of inadvertent pollution, which can lead to property damage, injuries, and fines. Cleanups from an accidental spill or leakage of a pollutant can be costly, especially if the leak causes injuries. An environmental impairment liability policy covers claim costs such as the following:
- Medical payments
- Property damage repairs
- Legal costs
How Much Does Junk Removal Business Insurance Cost?
Junk removal businesses need several lines of insurance to cover their greatest risk exposures. However, not every junk removal business has the same risk level, meaning insurance costs vary. For example, a small, owner-operated junk removal business with no employees or specialty vehicles will need far less coverage (and likely will pay less for insurance) than a large company with many employees, vehicles, and customers.
Some of the factors that influence the cost of business insurance include
- The number of vehicles needing insurance
- The value and customization of specialty vehicles or trailers
- The number of employees on the payroll
- Employee training and safety precautions
- The average expected number of customers
- The handling of hazardous substances or materials
- Any past or current lawsuits or insurance claims
Because insurance costs vary depending on coverage amounts and risk exposure, the best way to determine the cost is to contact multiple insurance agents for a quote. A junk removal business can then confidently choose the best policy by comparing the different quotes to find the best fit in coverage amounts and pricing.