Do You Have the Right Insurance? A Guide to Protecting Your Scrap Yard Business
- Dec 22, 2025
- 2 min read
Updated: 18 hours ago
Running a scrap yard or metal recycling business comes with serious risks. Heavy machinery, high foot traffic, fluctuating inventory values, and employee safety concerns mean that one incident can cause major financial damage.
Having the right insurance in place isn’t just smart—it’s essential for protecting your business, employees, and long-term profitability. This guide explains the core insurance coverage every scrap yard owner should have and why it matters.
Why Scrap Yard Insurance Matters
Scrap yards operate in high-risk environments where accidents, property damage, and employee injuries are more likely. Without proper insurance, owners may face:
Lawsuits from customer or vendor injuries
Costly equipment replacement after fires or theft
Lost income due to shutdowns
Regulatory or compliance-related financial exposure
Insurance helps ensure your business can recover quickly and continue operating.
General liability insurance is the foundation of scrap yard protection.
It helps cover:
Customer or vendor injuries on-site
Property damage caused by operations
Legal defense costs related to third-party claims
For scrap yards with constant foot and vehicle traffic, this coverage is critical.
While often overlooked in recycling businesses, professional liability insurance is increasingly important.
It helps protect against:
Operational or documentation errors
Pricing disputes or contractual misunderstandings
Claims tied to professional services or advice
As scrap yards modernize and use digital pricing and contracts, professional liability coverage adds an extra layer of protection.
Your scrap yard’s value is tied directly to its physical assets.
Property & equipment insurance helps cover:
Buildings and storage facilities
Heavy machinery, tools, and processing equipment
Inventory losses due to fire, theft, or weather events
This coverage protects your biggest investments and minimizes downtime after a loss.
Scrap yards are physically demanding environments, making workers’ compensation insurance essential.
It provides coverage for:
Medical expenses from workplace injuries
Lost wages for injured employees
Employer protection from injury-related lawsuits
Check Now: Workers’ compensation requirements at U.S. Department of Labor
In most states, workers’ comp is legally required for businesses with employees.
Common Insurance Gaps Scrap Yard Owners Face
Many scrap yard owners unknowingly operate with coverage gaps, such as:
Outdated equipment values
Inadequate liability limits for growing operations
Missing professional liability coverage
Policies that don’t reflect current staffing levels
Regular insurance reviews help prevent costly surprises.
How Wexford Insurance Helps Scrap Yard Owners
Not all insurance agencies understand the unique risks of metal recycling. Wexford Insurance specializes in helping scrap yard owners nationwide secure coverage tailored to their operations.
Wexford helps with:
Evaluating coverage gaps
Matching policies to actual operational risks
Working with carriers that understand scrap yards
Final Thoughts
Insurance isn’t just about compliance—it’s about protecting your livelihood. With the right mix of general liability, professional liability, property & equipment, and workers’ compensation insurance, scrap yard owners can operate with confidence and focus on growth.
If you haven’t reviewed your coverage recently, now is the time.
Contact us today.
