The scrap industry is exposed to an ever-shifting risk landscape. From operating heavy industrial machinery to environmental hazards, as a scrap yard owner/operator, your risk management strategy must fully cover you and include a strong Scrap Yard Insurance policy.
At wasteinsure, our brokers have decades of experience in providing Scrap Yard Insurance (also known as Recycling Yard cover). The policies we provide include a crucial aspect of protecting your assets and business: Scrap Yard Liability Insurance. We provide coverage for most types of scrap yards, from small independents to scaled-up recycling facilities, and everything in between.
Good insurance can protect a scrap yard business from going under after an event (such as fire or theft). Only last year in 2025, a major fire at a scrap yard in Gravesend set 5,000 tonnes of metal alight. While the cause of the fire is unknown, 35 firefighters were battling the blaze for two days.1 Without the right level of cover, damage like this can mean the closure of a business.
What makes scrap yards high-risk environments?
From an insurance perspective, scrap yards are placed in the more complex risk categories within commercial operations. A combination of the following factors creates risks that commercial policies are rarely able to accommodate:
- Hazardous materials
- Large machinery
- Unpredictable stock
- Public access
Cover for your premises: what needs to be included?
Your Scrap Yard Insurance policy must cover your premises and equipment at the correct level. The policies we provide include cover for:
- Material damage
- Buildings & structures
- Fixed plant equipment
Policies can protect your scrap yard around fire, storm, flood, theft, and accidental damage. If your yard has open-air storage, we can design your policy to cover weather-related losses – which can often be substantial.
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Stock Insurance
Underinsurance
Insurance that accurately covers stock such as scrap metal is equally important. Scrap metal prices fluctuate, and the value of materials held on your site at any given time can be considerable. Underinsuring stock, particularly at a time of rising commodity prices, is a common mistake that could leave you heavily out of pocket should you suffer a loss. At wasteinsure, we can review and monitor your cover to help reduce the risk of your stock being insufficiently insured.
Theft & Arson cover
Theft and arson might also be a concern for you as a scrap dealer/recycler. Metals such as copper, aluminium, and stainless steel can be a money spinner for criminals, and yards are often targeted. At wasteinsure we can source insurance that means you’re financially protected around a wide range of destructive events that could impact your business.
Business Interruption Insurance
Business Interruption cover should also form part of any Recycling Yard cover or Scrap Yard Insurance package. If a fire or flood for example, forces your yard to close temporarily, the ongoing costs such as employee wages, loan repayments, and site overheads can continue even without revenue coming in. Without this type of cover, a single incident can threaten the long-term viability of the business.
Liability Risks: when exposure can be severe
Scrap yard liability can be the area of greatest financial exposure. Liability claims can originate from multiple directions, and the costs, particularly where personal injury is involved, can be massive.
Public Liability Insurance
Members of the public visiting the site, whether to sell materials or collect salvage, are owed a duty of care. A slip, trip, or injury on-site can result in a compensation claim and associated legal costs that run into tens or even hundreds of thousands of pounds. Public Liability cover provides protection against claims like these. Most scrap yard operators will require a minimum of £5 million in cover, with many opting for £10 million or more depending on the nature of their business.
Employers’ Liability Insurance
This is a legal requirement for any business with employees. Scrap yards are physically demanding, high risk workplaces and accidents leading to injuries can happen. Cuts, crush injuries, back problems, and exposure to hazardous substances are all risk areas. Employers’ Liability insurance can cover compensation claims made by employees who suffer injury or illness because of their work.
Products Liability Insurance
Overlooked but increasingly relevant, Products Liability cover is essential for scrap yard businesses. If your yard sells reclaimed or refurbished parts – particularly automotive components – and those parts subsequently fail and cause harm, your business may face a products liability claim. Recycling Yard cover that includes this protection is essential for any operation involved in parts resale.
Environmental Liability Insurance
Environmental Liability Insurance is also important. Pollution events such as the following incidents can lead to significant remediation costs and hefty third-party claims:
- Fuel spillage
- Improper disposal of hazardous materials
- Flooding that carries contaminants off-site
Specialist Environmental Liability cover addresses this exposure, which standard policies commonly exclude.
Getting the right cover in place
No two scrap yards are the same. Size, location, the types of materials processed, and the presence of public access all influence your risk profile and the cover you need. Working with wasteinsure can enable you to secure a policy which won’t let you down.
The right Scrap Yard Insurance package is not an overhead to be minimised or overlooked. It is the foundation on which a resilient, sustainable business is built. We understand the realities of running a scrap business, which makes us best placed to structure your coverage to fully protect you.
Call: 01277 844 369
Get a Quote: https://wasteinsure.co.uk/#who
Frequently Asked Questions
Q: Is Scrap Yard Insurance a legal requirement?
Not all elements of it, but some are. Employers’ Liability Insurance is a legal requirement for any UK business with one or more employees, and failure to hold it can result in fines of up to £2,500 per day.2 Environmental Liability cover may also be required depending on the nature of materials handled and the terms of any Environment Agency permits.
Q: What level of Public Liability cover does a scrap yard need?
Most scrap yard operators should carry a minimum of £5 million in public liability cover, though £10 million is increasingly considered the standard for sites with significant public footfall.
Q: Will a standard commercial policy cover a scrap yard?
Generally, no. Standard commercial property and liability policies are designed for lower-risk business premises and typically exclude or limit cover for the kinds of risks common in scrap and recycling operations – heavy plant, hazardous materials, high-value fluctuating stock, and environmental liability. A purpose-built Scrap Yard Insurance policy, placed through a broker like us with sector expertise, is advised to ensure that the full range of exposures is properly addressed.
Q: Does Recycling Yard cover include protection for visiting vehicles and customers’ goods?
This depends on the policy. Some Recycling Yard Insurance packages can be extended to include goods in custody and motor trade elements if vehicles are driven or moved on site by your yard staff. It is important to discuss the full scope of your operation with us, as cover for visiting vehicles and third-party goods is not always included as standard and may need to be specifically arranged.