Insured Spotlight: Metal Recycling Facilities • Beacon Hill Associates

As with all sectors of the recycling industry, metal recyclers and scrapyards have seen dynamic growth in recent years. These facilities face increased pollution risks due to various processes like sorting, shredding, and melting metal. These operations can release hazardous substances and emissions into the environment if not properly managed. Other pollution concerns may include oils, batteries, radioactive materials, operational exposures, and more.

Over the past decade, several lawsuits have been filed against metal recyclers for air pollution and water contamination, causing hefty fines and reputational damage. Here are just a few examples of these pollution disputes:

A Dearborn, MI scrapyard agreed to pay over $1 million by December 2024 to control dust emissions after settling allegations of excessive air pollution.
A steel company faced settlements over water pollution with the Conservation Law Foundation (CLF) in November 2023, agreeing to pay $2M to local environmental organizations.
Three environmental groups accused a Florida-based metals recycling company of stormwater contamination in 2020, pointing to insufficient treatment technologies and pollution plans.

The Environmental Protection Agency (EPA) emphasizes the dangers of air pollution for these businesses, which can exacerbate asthma, emphysema, chronic bronchitis, and other pulmonary diseases. Moreover, hazardous materials such as asbestos, oil, and radioactive materials can be found in scrap metals. These substances can be released during transportation, sorting, compacting, and repackaging of metals, resulting in air, soil, and water contamination.

Specialized Pollution Insurance for Metal Recyclers:

Despite effective risk management and environmental practices, incidents at metal recycling centers can occur, leading to claims, lawsuits, fines, or penalties. Specialized pollution insurance is crucial for metal recyclers to protect them from environmental liabilities and related costs. This coverage includes Premises Pollution Liability, addressing site-specific exposures, as well as Contractors Pollution & Professional, which is designed to cover both pollution and E&O exposures. Many coverage enhancements are also available to suit the specific needs of the metal recycler.

Type: Blog

Topic: Recycling