These establishments are primarily engaged in processing and preparing recycled material for wholesale distribution to manufacturing facilities and industrial plants. Auto wreckers who dismantle automobiles for scrap are also included.
Dealing with scrap and waste can be dangerous and operations can put your business as well as your employees at risk.
This program can include the following important coverage options to protect you from industry-specific risks.
What is Scrap Material (Class Code: 5093)?
Class Code 5093 covers businesses that buy, process, sort, and sell scrap or recyclable waste in bulk to manufacturers and industrial buyers. Typical operations include collection, baling, shredding, sorting, storage, and short-term staging prior to transport. Because these facilities handle heavy equipment, combustible materials, and transported loads, the coverage focuses on commercial liability, property protection, and equipment coverage.
Who needs it
Wholesalers, scrap processors, auto wreckers, salvage yards, and brokers who move material in bulk generally seek this coverage. Small operators and larger recycling facilities both use it to manage operational hazards and commercial auto exposure tied to transporting materials. For operations that overlap with dismantling and recycling services, see Auto Dismantling and Recycling Industry Insurance (Class Code 91190) for closely related guidance: Auto Dismantling and Recycling Industry Insurance (Class Code 91190).
What it typically covers
Policies are often packaged to address common exposures including:
- Commercial liability for third-party bodily injury and property damage
- Property coverage for buildings, inventory, and staged scrap material
- Equipment coverage for balers, forklifts, shredders, and processing machinery
- Commercial auto for trucks hauling scrap and contractor autos
- Pollution liability for environmental incidents during handling or transport
- Workers’ compensation for on-site employee injuries
If you want broader context on similar markets and policy structures, see the Scrap Recycling Insurance overview here: Scrap Recycling Insurance.
Common exclusions or limitations
Standard exclusions may include intentional acts, certain types of pollution without added endorsements, wear-and-tear on machinery, and professional liabilities not tied to physical operations. Transportation-related pollution or hazardous waste handling often require specific endorsements. Underwriting factors and exclusions will vary by carrier, so review policy language carefully.
Factors that influence cost
Premiums depend on location, annual payroll and revenue, volume and type of material handled, loss history, safety programs, storage practices, and the value/age of equipment. Transportation routes and distance to processing facilities also affect commercial auto exposure and rates. Implementing risk management measures—lockout/tagout procedures, fire suppression, employee training—can reduce underwriting risk.
Proof of insurance & compliance
Buyers, municipalities, and contractors may request certificates of insurance or specific limits for general liability, pollution liability, or commercial auto. Proof requirements differ by contract and jurisdiction; keeping updated certificates and endorsements helps meet buyer and regulatory expectations without delay.
How to get a quote
To compare options and secure appropriate limits and endorsements, gather basic business details (operations description, payroll, vehicle list, loss runs, and equipment inventory) and request proposals from insurers. Get a quote: Get a quote.
Frequently Asked Questions
Do I need pollution coverage if I only store scrap temporarily?
Temporary storage can still create pollution exposures—many carriers require a pollution or environmental liability endorsement for certain materials. Discuss your storage practices with the insurer.
Will regular general liability cover damage caused during transport?
Damage during transport is usually covered under commercial auto; ensure autos hauling scrap are listed and have appropriate limits and cargo coverage if needed.
Can I add coverage for specialized machinery and tools?
Yes. Equipment and machinery can be covered via scheduled property or inland marine terms—provide serial numbers, values, and maintenance records to secure appropriate coverage.
Still have questions? Talk to a local insurance expert.