Manufacturing · Scrap Metal Dealers

Scrap Metal Dealer Insurance for Open-Air Yards

Open-air yards, balers, heavy equipment, outdoor inventory, trucks, and fluid-bearing loads call for insurance built around the way the yard actually runs. BLIS helps protect property, equipment, employees, vehicles, income, and environmental responsibilities without forcing the operation into a generic warehouse policy.

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Share your contact information and a few basics about your business. A licensed BLIS representative will review your request.

Notice at collection:BLIS collects the contact, location, business or household, and insurance-request details you provide so we can review and respond to this request. Website hosting and form-delivery providers process the submission for BLIS. Do not enter a Social Security number, driver’s license number, payment information, or medical information in a note. See our Privacy Policy for categories, recipients, retention criteria, and privacy choices.

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Licensed in CA, NV, AZ, TX, and FL.

Submitting this request does not bind coverage or guarantee a quote. BLIS is licensed in California, Nevada, Arizona, Texas, Florida. CA License 0M74955.

Sending this form does not start coverage or guarantee a quote, price, or coverage result. BLIS will review what you send and may ask for a few more details before discussing available options.

What to expect

What to expect after you submit

A BLIS representative reviews what you share, looks at what your business needs, and follows up if an important detail is missing.

  1. We learn how you operate

    A licensed BLIS representative reads what you send and gets familiar with your business.

  2. We look at what needs protection

    We connect your day-to-day work, property, people, and vehicles with the coverage that may matter.

  3. We fill in the blanks

    If something important is missing, we’ll ask a few focused questions instead of sending another long form.

  4. We explain the options

    When options are available, we help you compare price, limits, deductibles, exclusions, and policy terms.

  5. We stay available

    After coverage starts, BLIS can help with certificates, policy changes, audits, renewals, and claim questions.

Prefer to talk it through? Call (818) 306-8333Monday – Friday, 9:00 AM – 5:00 PM PT

Your operation

What matters when protecting a scrap metal dealer business

A scrap yard earns revenue by receiving, sorting, processing, storing, and shipping material efficiently. Fire, equipment damage, worker injuries, vehicle accidents, theft, and contamination can interrupt that cycle. Property, equipment breakdown, general liability, workers' compensation, auto, crime, and environmental coverage should work together around the materials you accept and the equipment your team uses.

Contaminated incoming loads start fires. Scrap dealers take material from demolition contractors, vehicle dismantlers, and walk-in sellers. Not all of it arrives clean. Pressurized containers, compressed gas cylinders, and batteries can ignite the moment they enter a baler, shear, or shredder. A processing yard fire spreads quickly — outdoor sorted material adds fuel, and major property loss follows.

Carriers who write this class ask directly about incoming material controls, sorting practices, and fire suppression. They'll want real answers, not a checkbox.

The building isn't the asset — the pile is. For most scrap dealers, outdoor yard inventory holds far more value than the structure above it. Standard commercial property is written to a building schedule and rarely covers outdoor stock with the same breadth as contents inside. Limits need to reflect current commodity pricing, not what metal was worth at last renewal.

An undervalued inventory limit only surfaces as a problem after a loss.

When the baler goes down, the yard stops. Balers, shears, hydraulic cranes, electromagnet attachments, and forklifts are the productive core of a scrap operation. A hydraulic failure that keeps the primary baler offline for weeks hits throughput, revenue, and buyer commitments simultaneously.

Equipment Breakdown coverage responds to sudden and accidental mechanical or electrical failure — the kind commercial property excludes by its own terms. If one machine drives most of your production volume, confirm it's on the schedule.

Payroll classification in a scrap yard carries real dollar consequences. Crane operators, equipment operators, scale staff, sorters, drivers, and office employees each fall under different Workers' Compensation codes. The rate spread between a yard-worker code and a clerical code can be substantial. Misclassifying equipment operators as general labor creates an audit shortfall at year-end.

We review payroll breakdowns and work descriptions during intake so the classifications hold up when the auditor arrives.

Fluid-bearing vehicles bring motor oil, transmission fluid, battery acid, brake fluid, and refrigerants into the yard. A release that reaches soil or a stormwater drain can create environmental liability. Standard general liability policies commonly restrict pollution claims, so separate pollution liability coverage or an endorsement may be needed. Available options vary significantly for scrap operations.

Regulatory compliance matters to both the business and its insurer. Many states require scrap dealers to verify sellers, keep transaction records, and report to law-enforcement databases. Violations can lead to fines, license suspension, or civil liability, and insurance generally does not cover regulatory fines. Organized compliance records can support a smoother coverage review.

Collection trucks and delivery vehicles run outside yard coverage. Trucks, flatbeds, and roll-off vehicles picking up material from commercial accounts or hauling commodity to mills carry their own commercial auto exposure — written separately from the yard program. The type of material in transit raises cargo coverage questions that depend on what's being moved and how it's routed.

Carriers want to understand both the vehicle use and the load profile before quoting.

Prepared commodity carries product liability after it leaves the gate. Contaminants in a processed scrap shipment that damage a buyer's equipment — or cause a loss at a receiving facility — can generate a product liability claim. It's an industrial commodity exposure, not a retail scenario. At scale, under purchase agreements with downstream buyers, it warrants a deliberate coverage review.

A yard fire doesn't just destroy property — it stops revenue. Equipment breakdown, suppression events, and fire damage can all halt operations for weeks. Purchase commitments, payroll, equipment financing, and buyer delivery obligations continue regardless. Business Income coverage replaces lost net income and continuing operating expenses during a covered outage.

Review the limit against realistic outage scenarios — not just the time to clear debris.

Coverage

Coverages commonly considered for scrap metal dealer operations

These are common coverages to consider, not a preset package. The right mix depends on how your business works, your contracts, state requirements, and the policy options available.

  • General Liability

    GL covers third-party claims for bodily injury and property damage from your operations, premises, and products. For scrap metal dealers, this includes customers and drivers on the yard. It also includes equipment activity visible from adjacent properties and product liability from material sold to downstream buyers. If you're accepting material from the public, you've got more third-party traffic than most manufacturers. That traffic raises slip-and-fall and equipment-related premises exposure. Product liability for commodity sold to mills is evaluated separately from general premises liability.

  • Commercial Property

    Property coverage for a scrap dealer must address the full asset picture. This includes processing equipment, office contents, and outdoor yard inventory. That outdoor inventory may represent the bulk of the operation's current value. The policy form, covered causes of loss, and outdoor property conditions all matter. Commodity prices swing. Reviewing limits as prices shift is part of responsible policy management — we'll help you stay on top of that.

  • Equipment Breakdown

    Equipment Breakdown coverage addresses sudden and accidental mechanical, electrical, or pressure-system failure in covered equipment. Property coverage typically excludes this by its own terms. For scrap metal dealers, covered equipment can include balers, shears, hydraulic cranes, electromagnet systems, and industrial scales. Electrical distribution equipment often qualifies too. Equipment Breakdown can respond to direct repair cost and to the business income impact of the outage — both are subject to the policy's terms.

  • Workers' Compensation

    Scrap yard workers face real physical hazards: heavy equipment movement, crane and magnet operations, sharp irregular metal, and heat exposure. Workers' Comp covers employee medical expenses and lost wages for work-related injuries. Accurate payroll classification is critical. The rate differential between codes can be significant. The audit adjusts premium based on actual payroll and confirmed classification — don't let misclassification create a surprise at year-end.

  • Commercial Auto

    Dealers who operate collection trucks, roll-off vehicles, flatbeds, or delivery equipment need commercial auto coverage. Coverage should reflect how each vehicle is used. Liability for accidents and physical damage on company vehicles are both covered. If you're hauling significant volumes of processed commodity to buyers, you may face cargo liability questions. The right structure depends on the type and value of material being moved. Options include the auto policy, an inland marine policy, or a cargo form.

  • Pollution Liability

    Standard general liability policies commonly limit or exclude cleanup costs and third-party claims from pollutant releases. Accepting fluid-bearing vehicles, transformers, or contaminated metal can introduce oil, battery acid, hydraulic fluid, and refrigerants into soil or stormwater systems. Pollution liability coverage may address that gap, but some insurers restrict or exclude it for scrap yards, so the available options require careful comparison.

  • Business Income

    Business Income coverage replaces lost net income and continuing expenses when a covered property loss suspends operations. The waiting period before coverage activates matters. So does the period of restoration covered. Review whether the limit reflects the realistic revenue impact of an extended outage. If you're carrying ongoing purchase commitments, fixed payroll, and financing costs, that income disruption exposure is real. It materializes when the yard can't process or ship.

What shapes your quote

Details that can affect your quote

These details can affect which options are available and what they may cost. You don't need all of them to start — send what you have, and we'll follow up on anything important that's missing.

Type of material accepted
Ferrous, non-ferrous, mixed, automotive, and fluid-bearing loads create different fire and environmental concerns. A clear material list helps determine the property, liability, and pollution protection the yard may need.
Incoming load controls and sorting practices
Documented inspection for pressurized containers, fuel tanks, and batteries helps show how the yard prevents fires and contamination before material reaches processing equipment.
Processing equipment type and values
Balers, shears, shredders, cranes, and forklifts each affect property, equipment breakdown, and general liability pricing. Some insurers will not consider operations with shredders. Equipment values should reflect current replacement cost, not depreciated book value.
Annual revenue or tonnage processed
Revenue or throughput is commonly used to calculate general liability cost. A realistic estimate helps the owner budget and reduces a large adjustment after the policy is audited.
Total property values
building, equipment, and yard inventory — Outdoor inventory fluctuates with commodity prices. What it was worth at last renewal may not reflect today. Limits that don't move with the market leave the gap in the wrong place.
Annual payroll by classification
Crane operators, equipment operators, yard workers, scale and admin staff, and drivers carry distinct WC rates. Presenting a single combined payroll figure creates audit risk. Carriers rate and audit the WC policy against roles, not totals.
Vehicle fleet
number, type, weight class, and use — Daily pickup and delivery creates a fundamentally different commercial auto exposure than a yard with no collection vehicles. Carriers want fleet composition, weight class, and use before they quote.
Acceptance of end-of-life vehicles or fluid-bearing equipment
Tell BLIS whether you accept these items and when fluids are drained. The answer can affect pollution exclusions, available coverage, and insurer requirements.
Fire suppression system type and condition
Sprinklers, outdoor deluge systems, and fire-department access lanes affect property and liability options. Document what is installed, maintained, and accessible before requesting terms.
Prior claims history (last 3–5 years)
Insurers review how often fire, equipment breakdown, and third-party liability claims occurred and how costly they were. Prior fire or equipment losses can reduce the available options. Be ready to explain what the business changed afterward.
State regulatory compliance posture
Documented seller identification records and compliance with applicable scrap dealer statutes are reviewed by carriers who write this class. If you're current and have the records, present it proactively — it's a favorable signal.

Coverage examples

Example claim scenarios

A few situations that show how coverage can respond when something goes wrong. These are examples only — not actual claims, and not a guarantee of any outcome.

  • Example scenario

    Yard fire from pressurized container in incoming load

    A scrap dealer accepts a mixed demolition load containing an unidentified compressed-gas cylinder. A cutting torch ignites the cylinder, and the fire spreads to nearby material. The loss damages inventory and a baling machine and injures a worker. Commercial property, Workers' Comp, and GL may address different parts of the event, subject to each policy's terms.

    The example shows why clear incoming-load and sorting procedures matter.

  • Example scenario

    Environmental release from fluid-bearing vehicles

    A scrap dealer operating a vehicle intake yard processes end-of-life vehicles across the property. Over time, residual motor oil, transmission fluid, and battery acid migrate into the soil from vehicles awaiting crushing. The contamination reaches a stormwater drainage channel. The state environmental agency issues a notice of violation and requires site assessment and cleanup.

    A standard GL policy with a pollution exclusion may not respond to cleanup costs or third-party claims from the release. Pollution Liability coverage — if in place — can respond to covered cleanup and third-party claims. This is subject to the policy's terms and exclusions.

  • Example scenario

    Equipment breakdown halts processing operations

    A hydraulic failure in the primary baler takes the machine out of service at the start of the busy season. Repair requires specialized parts not available locally. The machine is offline for several weeks. The yard continues to accept inbound material but cannot process or ship to buyers. This creates a backlog and lost sales during the outage period. Equipment Breakdown coverage can respond to the repair cost.

    Business Income coverage can respond to lost net income and continuing operating expenses during the covered outage period. This is subject to the applicable policies' terms, waiting periods, and limits.

  • Example scenario

    Third-party bodily injury claim — yard premises

    A truck driver delivering industrial scrap to a dealer's yard slips on the yard surface. Residual oil from previously processed fluid-bearing material made the surface slippery. The driver sustains an injury and makes a bodily injury claim against the yard operator. General Liability can respond to covered third-party bodily injury claims from yard premises.

    This includes medical expenses and legal defense costs, subject to the policy's terms, limits, and exclusions. Premises liability for commercial visitors and delivery personnel is a routine exposure. Scrap yards that operate as a receiving location carry this exposure continuously.

The claim scenarios above are illustrative examples only. They do not represent actual clients, actual claims, or guaranteed coverage outcomes. Coverage for any specific situation depends on the policy terms, conditions, exclusions, and the facts of the claim.

After coverage starts

Common certificate and service needs

Once coverage is in place, new contracts or business changes can mean new paperwork. A certificate only summarizes policy information; the policy and its endorsements determine the actual coverage.

Contract and certificate requests

  • Certificate of insurance for property landlords or facility owners — leased yard property and processing facilities routinely require proof of insurance as a lease condition. Minimum GL limits are specified; the landlord is named as additional insured. We issue the certificate and confirm the endorsement language matches what the lease requires.
  • Additional insured endorsements for commercial material suppliers or buyers — industrial generators and mill buyers often require both specified coverage and additional insured status under purchase agreements or sales contracts. We review the contract wording before anything goes out.
  • Evidence of Workers' Compensation coverage for state licensing — several states tie active WC coverage to scrap dealer licensing and renewal. If coverage lapses, the license can follow. We'll confirm coverage is in place and the certificate reflects current policy terms.
  • Certificates for equipment financing and lender requirements — lenders financing balers, cranes, shears, or vehicles need to be listed as loss payees on the commercial property or inland marine policy. We handle the endorsement and the certificate.
  • Pollution Liability evidence where required by lease or permit — some municipalities and environmental agencies require documented environmental liability coverage as a permit condition for yards accepting vehicle scrap. We confirm the certificate matches what the authority specifically requires.

Ongoing service

  • Mid-term property limit adjustments when commodity prices move — outdoor inventory values follow metal markets. A sharp price increase can leave insured inventory values materially understated mid-policy. We support limit reviews between renewals when the market moves.
  • Equipment schedule updates for new or disposed-of processing equipment — a new baler, crane, or shear needs a mid-term endorsement before it arrives, not after. We handle the update so the schedule stays current.
  • Workers' Compensation audit preparation — WC audits for scrap yards require payroll broken out by job function. A combined total creates problems with the auditor. We help organize the documentation before the carrier requests it.
  • Renewal strategy when operations change — Adding vehicle processing, opening a second location, or increasing volume can change the available options. BLIS reviews those changes before renewal and explains when comparing new insurers makes sense.
  • Pollution Liability options — Some insurers exclude pollution, while others offer an endorsement, sublimit, or separate policy. BLIS helps identify the options that may fit the yard's materials and operations.
  • Claims support after a fire or equipment loss — multiple coverage lines, multiple adjusters, and complex documentation. We stay in the conversation and help coordinate between your yard and the carrier through the review process.
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Review Your Yard Coverage

Coverage availability, pricing, terms, conditions, limits, and eligibility depend on the insurer, state, details of the business, claims history, and policy terms. Nothing on this site guarantees coverage, pricing, approval, or savings.

Examples are hypothetical and illustrative. They show how a coverage can respond, not a promise that any specific claim will be covered. Actual coverage depends on your policy's terms, conditions, and exclusions.

Blue Lagoon Insurance Services, LLC is an independent insurance agency licensed in California (0M74955), Nevada (3983946), Arizona (3003332484), Texas (2966873), and Florida (L120266). BLIS is not an insurance company; final decisions about coverage, terms, and pricing belong to the insurer.