Textile recyclers are struggling to obtain insurance for their premises and machinery at “realistic prices”, according to the Textiles Recycling Association (TRA).
Phil Gellor, director of textile recycler I&G Cohen and member of the TRA, said: “We seem to get a raw deal with the insurance industry. Insurers are becoming more risk-averse, and the range of insurers that are prepared to offer to us is diminishing all the time.”
Tim Rogers, senior account director at Direct Insurance Group, told MRW that most UK textile recycling activity involves sorting, which is less of a risk than processing or shredding. However, underwriters still regard it in the same bracket as recycling and waste management and its associated high risk.
Machinery and technology is advancing rapidly, so insurers have difficulty understanding the new practices. Consequently textile recyclers must “elaborate clearly” to insurers what processes they carry out and how they do them, Rogers said.
Members of the wider waste and recycling industry have been facing significant rises in their insurance premiums after a spate of fires hitting the sector in recent years.
For example, in April 2014, Catlin Insurance Company said it would no longer underwrite risks for the waste industry, having made a net loss during five years of covering waste businesses.
Gellor said that even “astute and attentive recyclers” were now experiencing an increase in insurance costs.
He added that insurance premiums should be offered on a case by case basis: “Insurers are quite happy to push people to [insurance] markets which are much smaller and more expensive.”