A junk removal business is one of the businesses that requires you to have the needed insurance policy coverage in place before starting out.
The fact that junk removal businesses typically use trucks, trailers, and equipment to collect and transport junk to appropriate disposal sites shows that it is a business that requires full insurance coverage. Besides, the junk removal business also handles hazardous materials, like old appliances with refrigerants.
With the above in mind, it will be safe to say every junk removal business needs insurance policy cover, and the insurance policy cover is to protect the truck drivers, the customers, and lastly other road users.
If you are caught driving without primary liability insurance, it will result in increased premiums in the future, and in the event of an accident, the driver will be responsible for the damages.
Best Insurance Policy for a Junk Removal Business
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General Liability Insurance
General liability insurance offers liability insurance coverage that helps protect a business from claims that come as a result of bodily injuries, equipment damage, fire outbreaks, or property damage to others within your business premises.
Also, general liability insurance covers legal defense costs, including attorney fees, court costs, and settlements or judgments in lawsuits against your business.
Apart from the fact that a general liability insurance policy is essential for all businesses, in most jurisdictions in the United States, it is compulsory for a junk liability business to have general liability insurance coverage.
Cost: On average, general liability insurance costs for junk removal businesses are about $1057 annually or $88 a month in the United States.
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Commercial Auto Insurance
Commercial auto insurance is important if your business owns or operates a fleet of vehicles and junk removal trucks. Interestingly, you cannot operate a junk removal business without having the trucks, trailers, and equipment to collect and transport the junk to appropriate disposal sites.
Basically, commercial auto insurance covers accidents, damage to your vehicles, and liability in case one of your drivers gets involved in an accident while transporting junks.
Cost: Small businesses including junk removal businesses pay an average premium of $147 per month, or about $1,762 annually, for commercial auto insurance in the United States.
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Commercial Property Insurance
The fact that you must have a parking facility to park your truck, or a recycling facility means that it is mandatory to have commercial property insurance coverage for the business.
Basically, a commercial property insurance policy covers damage to your business premises (your parking facility and recycling facility), trucks, trailers, and equipment used in collecting and transporting the junk, and inventory in and around the commercial property. Note that some commercial property insurance policies can also cover your office equipment.
Cost: Generally, commercial property insurance for junk removal businesses costs an average of $756 annually or approximately $63 per month in the United States.
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Workers’ Compensation Insurance
The only reason why the owner of a junk removal business should not consider buying Workers’ Compensation Insurance is if they don’t plan to hire employees.
Unfortunately, it is almost impossible for one person to run a junk removal business. In essence, if you have plans to hire employees to work for or with you, then you must make provisions for workers’ compensation insurance.
Besides, workers’ compensation insurance is typically required by law in the United States for all businesses that have employees.
Cost: The average cost of workers’ compensation insurance is $936 per employee, per year, or $78 per month in the United States.
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Commercial Umbrella Insurance
Commercial umbrella insurance complements your other liability coverages by taking over when your other liability coverage limits have been reached.
Although commercial umbrella insurance is not mandatory for a junk removal business, it will not be out of place if you go the extra mile to purchase this insurance for your junk removal business.
As a matter of fact, if you own a big junk removal business and you own several junk removal trucks and equipment, then you should make sure you buy commercial umbrella insurance.
Cost of Commercial Umbrella Insurance: Commercial umbrella insurance costs about $40 per month for each $1 million of additional coverage. Your level of risk and how much coverage you buy determine the cost of this policy.
Note that many small businesses (17%) pay less than $500 per year for umbrella insurance and 36% pay between $500 and $1,000 per year.
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Environmental Liability Insurance
Given the nature of waste and its potential environmental impact, it is ideal for a junk removal business to subscribe to environmental liability insurance.
Environmental liability insurance policy helps cover the costs of cleanup and legal defense in case your business is held responsible for environmental damage caused by waste materials.
Cost: The average environmental liability insurance cost in the United States is $140 a month or $1,680 a year for a $1 million liability insurance.
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Medical Payments Insurance
It is important to note that this insurance protects all your staff members and clients who are within the vicinity when an accident happens.
If anyone is injured, irrespective of who is at fault for the accident, medical payment coverage will cater to the associated medical bills.
It is advisable to speak with a licensed insurance agent to determine if it is a viable option for your junk removal business insurance needs.
Cost of Medical Payments Insurance: The average national cost for health insurance is $456 for an individual and $1,152 for a group per month. However, costs vary among the wide selection of health plans.
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Physical Damage Insurance
This is the insurance coverage that protects your junk removal trailers, trucks, and equipment directly. If your junk removal trailers, trucks, or equipment are damaged or destroyed due to unexpected events and perils, this coverage will ultimately cater to their repairs and replacement.
Note that physical damage insurance policy coverage is only applicable for utility trucks or equipment that are not fully paid for, and those that are leased because it provides the highest level of loss protection your company can get. You have the option of choosing Comprehensive Physical Damage, Collision Damage, or Specified Peril (CAC).
Cost of Physical Damage Insurance: In the U.S. most businesses pay an average of $1,771 per year for full coverage utility truck insurance, or about $148 per month, according to Bankrate’s 2022 analysis.
Insurance Companies That Offer Policies for Junk Removal Business?
i. Progressive Commercial
Progressive offers commercial insurance policies, including general liability and commercial auto insurance, suitable for junk removal businesses. Progressive Commercial provides customizable coverage options to meet specific business requirements.
ii. NEXT Insurance
NEXT Insurance is a one-stop shop to help you get the waste disposal and related insurance you need to protect your business from accidents, injuries, legal fees, and damaged vehicles.
NEXT Insurance packages typically include General liability, Contractors’ E&O, Commercial auto, Workers’ compensation, Tools and equipment, and Commercial property. You can contact them to get a quote for your junk removal business.
iii. Hartford
Hartford is the 13th-largest property and casualty insurance company in the United States. It sells products primarily through a network of agents and brokers and has also been the auto and home insurance writer for AARP members for more than 25 years.
Hartford is known for offering tailored insurance solutions for small and midsize businesses, including those in the waste management and junk removal industry.
Interestingly, Hartford provides insurance coverage such as general liability, commercial auto insurance, and business property insurance.
iv. Liberty Mutual
Liberty Mutual Group is an American diversified global insurer and the sixth-largest property and casualty insurer in the United States.
Liberty Mutual is a well-established insurance provider that offers a wide range of commercial insurance options, including general liability, property insurance, and commercial auto coverage, which can be suitable for junk removal businesses.
v. CAN
CAN over the years as an insurance company has been at the forefront when it comes to providing commercial insurance coverage for a variety of industries, including waste management and junk removal businesses. CAN may offer customizable insurance solutions to address the specific risks of your business.
vi. XINSURANCE
XINSURANCE offers solutions to insurance for waste haulers and trash collectors. With XINSURANCE, you will have the customized coverage you need through their all-in-one approach.
By reviewing your operations and experience level, the company will provide insurance solutions made to fit your needs.
So no matter the situation, no matter the risk or history, they are here to help you take out the trash. Note that XINSURANCE does not provide worker’s compensation.