It is a massive challenge for insurers to cover the recycling industry. The frequency and severity of fire losses means that it is very difficult to insure at a profit. However, there is no denying the importance of a growing industry that plays a huge role in the global economy. Even though large enterprises used to dominate, we are now seeing smaller, privately owned, recycling companies become more common.
There are plenty of different processes and technologies that are used in recycling. However, the fact most waste can catch on fire is the common denominator. Additional risks can also be factored in such as workers who have not been trained enough, and poor housekeeping standards.
There are three types of common hazards to a recycling business: physical, human or economic.
Physical Hazards
Most waste is highly combustible, and this is one of the main reasons why recycling companies are such a risk. Cardboard, paper, textiles, and plastics are all common waste materials, and are highly flammable. The fact that all the waste is stored on premises along with other combustible chemicals is an additional hazard.
Machinery is also a huge hazard as they operate at high pressure, high temperature, and maintenance can also sometimes be neglected. Shredders, crushers, and conveyors are all common in the workplace, however, there are also new machines being created in order to recycle unique material.
It is quite often that recycling companies are based in areas that have previously been home to other manufacturing activity. Because of this, it can mean they are unsuitable for the role and it can have poor firefighting systems. As there are usually huge open storage areas with high piles of waste at recycling facilities, fighting fires can be seriously challenging.
Human Hazards
Poor equipment and machinery maintenance can be a big problem, as can a lack of time spent in risk protection measures. Arson is also common at recycling facilities as a lot of sites are left unattended at night.
Economic Hazards
Damage caused by fires are not just restricted to buildings, loss of materials, and machinery. Some and toxic materials will spread to the local area which causes impairment to the environment. Costs can be high for decontamination, for example, the water used to extinguish fires is toxic, and will need to be cleaned and disposed.
Quite often after an incident, licenses for recycling can be withdrawn by authorities and reissuing can take some time. This can result in a substantial loss of earnings before activity can take place again.
The volatility of market prices for recycling materials can have a role in the regulatory of fires at companies. As prices drop, it is easy to purchase more, resulting in excess storage. This obviously increases fire risk to the company.