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Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a junkyard.

Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a junkyard.

This article will discuss the primary insurance coverage for junkyards, general liability insurance, as well as additional policies that are appropriate for this industry.

Junkyard General Liability Insurance

Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.

General liability insurance covers the following risks:

Physical harm

Damage to property

Medical expenses

Legal defence and decision

Personal and commercial harm

While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.


Example 1: A client slashes his arm on a protruding engine component while hunting for a certain auto part, necessitating a trip to the hospital and maybe surgery. His medical expenditures should be covered by your general liability coverage.

Example 2: A billboard and a new tagline are part of your marketing effort. Another nearby company files a lawsuit against you, claiming that your tagline is too similar to theirs. Should they win the court action, general liability insurance should pay the expense of legal counsel and damages.

Example 3: You want to grow your company by buying the property next door. The bank requires proof of liability insurance as part of the loan arrangement. That responsibility should be met by general liability insurance.

Example 4: A robber climbs your property’s fence, and your guard dog attacks him. The thief is suing your company for medical expenses and pain and suffering. The medical expenditures and possible damages granted by the court should be covered by general liability insurance.

Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.

General Liability Insurance Cost

Junkyards in the United States typically pay between $450 and $1,000 per year for $1 million in general liability insurance.

The cost of your coverage will be determined by a number of variables. Among them are your:



Employees’ number

Per-occurrence restriction

The overall aggregate limit

You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.

Other Types of Coverage Required by Junkyards

While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that all junkyards should have include:

Insurance for Commercial Property

Junkyards need a substantial amount of land to function. Commercial property insurance protects your company’s real estate and property from risks such as fire and weather.

This policy is often included as part of the policy of a company owner (BOP). Whether you are a building owner or a tenant, you can customise this coverage to meet your unique business insurance requirements.

Insurance for Workers’ Compensation

Workers compensation insurance is required by the state for all employees. If an employee is injured or becomes sick while doing work-related tasks, the insurance will pay their medical expenditures as well as a portion of their missed income. It also shields the company from litigation by providing legal counsel if an employee files a case.

Workers’ compensation is often bought as a separate insurance.

Coverage Options for Some Junkyards

In addition to the insurance listed above, your junkyard may need other forms of coverage based on specific features of your business. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.

Insurance for Home-Based Businesses

Many junkyard owners reside on the site where they operate their business. Because homes insurance does not cover commercial property and damages, it is essential to have enough coverage. Check with a homes insurance carrier to determine whether an extension of coverage is available for an extra fee. If not, home-based business insurance may be purchased as part of a company owners policy (BOP).

Umbrella Liability Insurance for Businesses

Being a junkyard owner exposes you to a lot of uncontrollable liability hazards. While a general liability insurance can cover you in the event of a liability claim, the costs of a lawsuit may quickly pile up. If your underlying general liability limitations are exhausted, a business umbrella coverage will take over. This coverage assists in the payment of extra legal bills and court-ordered damages.

Additional Security Measures for Your Company

Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.

With this in mind, here are a few steps you can take to better secure your company:

Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)

To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)

Keep your company licences up to date.

Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.

If your company is an LLC, you should check into LLC insurance.