Piles of Metal, Heavy Shredders, and Fire Waiting to Happen.
Protecting scrap metal dealers, metal recyclers, and processing yards
Scrap metal recyclers buy, sort, process, and sell ferrous and non-ferrous metal — collection, shredding, baling, torch-cutting, and resale to mills. The defining feature is large accumulations of combustible and mixed material processed with heavy machinery on a yard exposed to fire, pollution, and equipment failure, plus a cash-buying operation that attracts theft and fraud. That fire-plus-environmental-plus-heavy-equipment profile is what defines the class and makes it a hard-market risk. A scrap recycler needs coverage built around fire and equipment exposure, pollution and environmental liability, and the heavy machinery, crime, and property of a scrap yard. This is a corner of environmental and property insurance built for how scrap operations actually take loss.
Properly structured coverage protects the operation, its equipment, and the surrounding environment.
The Scrap Recycler's Signature Exposures
The defining exposure is fire: shredders and torch-cutting create ignition, mixed scrap hides fuel and — increasingly — lithium-ion batteries and pressurized vessels that explode and ignite, making yard and shredder fires frequent and severe. Pollution and environmental liability is close behind: soil and groundwater contamination from fluids, metals, and runoff, and stormwater compliance on an open yard. Heavy mobile equipment (shredders, balers, cranes, magnets, loaders) is high-value and breakdown-prone, torch and machinery work injures workers, and a cash-buying model brings theft, fraud, and stolen-material exposure. Premises and auto for collection round it out.
Key Risks in Scrap Metal Operations
Scrap metal recyclers face exposure related to:
A shredder or yard fire, including lithium-battery or pressurized-vessel ignition
Soil, groundwater, or stormwater contamination
Equipment breakdown of a shredder, baler, or crane
A worker injured by machinery, torch-cutting, or material handling
Theft of metal, cash, or equipment, or purchase of stolen material
A fire or pollution event affecting neighboring property
A collection-truck or loader accident
Piles of metal, heavy shredders, and fire waiting to happen is what most defines the class.
Core Coverages for Scrap Metal Recyclers
A properly built scrap program typically includes:
Commercial Property & Fire (Yard, Stock, Buildings) — Covers the facility, stock, and equipment, with fire the central peril.
Pollution / Environmental Liability — Covers soil, groundwater, stormwater, and contamination exposure from the operation.
Equipment Breakdown & Mobile Equipment / Inland Marine — Cover shredders, balers, cranes, magnets, and loaders — failure and physical damage.
Commercial General Liability — Covers third-party injury and property damage, including fire spread to neighbors.
Commercial Crime & Cash Coverage — Cover theft, employee dishonesty, and cash-buying exposure.
Commercial Auto (Collection Fleet) — Covers roll-off and collection trucks.
Workers' Comp, Business Income & Umbrella — Cover a high-hazard workforce, lost income after a fire, and higher limits.
What's Commonly Overlooked
Scrap programs are most often weakened by:
Fire protection and property valuation that don't reflect shredder and lithium-battery fire risk
Pollution/environmental coverage omitted or too narrow for an open yard
Mobile equipment and equipment breakdown underinsured
Cash and stolen-material exposure not addressed by crime coverage
Business-income limits short for a shredder or facility rebuild
The gaps that hurt most are unaddressed fire/environmental exposure and undersized equipment coverage.
Real-World Claim Examples
A lithium-ion battery in mixed scrap ignites a yard or shredder fire
A contamination event triggers environmental cleanup
A shredder or baler failure halts processing
A worker is injured by machinery or torch-cutting
Cash or metal is stolen, or stolen material is purchased
Any one of these can be significant, and the fire and environmental claims are the most distinctive.
Regulatory & Licensing Context
Scrap recycling is regulated environmentally (EPA and state hazardous-waste, stormwater/SWPPP, and air rules; RCRA where applicable) and through state scrap-metal dealer laws requiring seller ID, transaction records, and holding periods to deter theft of stolen metal. OSHA governs machinery, torch-cutting, and material-handling safety, DOT rules apply to collection fleets, and local zoning and fire codes govern the yard. Fire-code and NFPA guidance increasingly addresses lithium-battery and combustible-material storage.
Why Proper Placement Matters
Underwriters weigh the operations (shredding, torch-cutting, ferrous vs non-ferrous), fire protection and battery/contaminant controls, environmental history and stormwater compliance, equipment values, cash-buying controls, and loss history. Because fire and environmental severity make it a hard class, scrap recyclers are placed through environmental and specialty-property markets that price the yard-fire and pollution exposure. Hardening fire controls, securing real pollution coverage, and insuring mobile equipment to value are the essential steps.
Our Approach
At Cory Washington & Co., we insure scrap metal recyclers around the fire and the ground — placing property and fire coverage that reflects shredder and lithium-battery risk, pollution/environmental liability for the yard, and equipment-breakdown and mobile-equipment coverage for your machinery, plus crime, fleet, and business income. We also insure related businesses, including waste hauling and recycling operations, auto salvage and dismantlers, junk removal companies, and manufacturers.
Piles of metal, heavy shredders, and fire waiting to happen make a scrap recycler a distinct risk — we build the coverage to match it, fire, environmental, and equipment included.
All insurance descriptions on this website are provided by Cory Washington & Co. LLC strictly for general informational purposes. They are not intended to be, and should not be relied upon as, legal, financial, or insurance advice. The information presented is general in nature and does not guarantee the availability, terms, conditions, or scope of any insurance coverage. Actual coverage is determined solely by the specific policy language issued by the insurer and remains subject to underwriting approval. Nothing on this website creates or implies an agent-client relationship, binds coverage, or alters any existing policy. Cory Washington & Co. LLC expressly disclaims any liability for actions taken, or not taken, based on the content provided here. For advice regarding your particular situation, please consult directly with a licensed insurance professional at Cory Washington & Co. LLC or another qualified insurance professional, and always review your policy documents in full.
See the coverages a scrap metal & recycler business may carry — core, prevalent, and situational — plus the gap most often missed, in the Scrap Metal & Recycler Coverage Checklist.
Complete the Scrap Metal & Recycler Supplemental online in a few guided steps, download the fillable PDF, or browse all applications.
Frequently Asked Questions
How do I get scrap metal & recycler insurance through Cory Washington & Co.?
Request a quote or contact our team. We start with a short conversation about your operations, analyze your exposures, then negotiate scrap metal & recycler insurance across multiple carriers that compete for your account and present options with the trade-offs explained. Cory Washington & Co. LLC is licensed in all 50 states.
How are scrap metal & recycler insurance premiums priced?
There is no flat rate. The cost of scrap metal & recycler insurance reflects your industry, your size (payroll and revenue), your claims history, and the limits and deductibles you choose. We market your account to multiple carriers, compare the real quotes side by side, and explain what is driving each number so you can weigh coverage against price with confidence.
Is scrap metal & recycler insurance mandatory?
Whether scrap metal & recycler insurance is strictly required depends on your state, your contracts, and your lenders or clients. Even where it is not mandatory, going without it can leave serious financial gaps. We assess your exposure and any contractual requirements, then structure coverage that meets both.
What if another agency has already declined or non-renewed my coverage?
Difficult, specialty, and previously-declined placements are a core part of our work. We access excess & surplus (E&S) and specialty markets that many generalist agencies cannot, and we explain the trade-offs clearly so you can decide with confidence.
Available in all 50 states. See how requirements differ in California, Texas, Florida, New York, or choose your state.