Do I Need Insurance for a Junk Removal Company?

by Carol Deeb; Updated September 26, 2017

Starting a junk removal company involves attention to many details. After you apply for the licenses and permits required by your local jurisdiction, purchase your vehicles and hire employees, you will need to determine how to best to protect your investment. Purchasing commercial insurance to adequately cover all of your business activities is important in the junk removal industry.

Purpose

Whether you have purchased a franchise or are opening a junk removal business on your own, you will be performing most of the same tasks for your clients. Using a truck or other large vehicle, you and your employees will haul unwanted items from people's homes. Some of the junk that you will be asked to remove will be furniture, trash, wood and other construction materials, large appliances and electronics. More than likely, you will not be allowed to take chemicals or other hazardous materials. Your employees will be driving a truck, lifting items and carrying them in and out of the vehicle. There is a chance that they can be injured. Also, since the owner of the junk may be present, they may be hurt, too. Commercial business insurance will protect you up to your policy limits if you are liable for damage or injury.

Business Insurance

Commercial insurance policies protect your business against theft and other losses. However, an important facet of coverage is commercial liability. This type of policy is for property damage or injury to your customers. If you are sued, the insurance company will defend you and pay a judgment up to your policy limit. If you have low coverage, the amount over your limit will be paid by you. Most commercial business policies also will cover you in claims of copyright violations. However, general business coverage normally excludes claims of injury by employees, damage by company-owned vehicles and intentional damages.

Vehicle Insurance

As a junk removal company, you will have at least one, or possibly a fleet, of vehicles. With employees driving around town or further, you risk the possibility that one of your vehicles will cause bodily injury or property damage in the course of doing business. This exposes you and your company to claims of liability that are not covered by your general business policy. If the registration on the vehicles is in your company's name and are driven by your employees, you will need commercial insurance.

Workers' Compensation

Since employees may be exposed to heavy lifting and other on-the-job hazards, it will be your responsibility to keep them safe. Providing training and the proper equipment is the first step. However, if an employee is injured while performing duties, you will be liable for paying medical expenses and a portion of lost wages. You also open yourself up to lawsuits filed by injured employees. Workers compensation insurance compensates your employees and protects you from being sued in most instances. Each state has its own requirements for employer policies, so research the law where you do business to make sure that you are operating legally.

About the Author

Carol Deeb has been an editor and writer since 1988. Her work has appeared in magazines, newspapers and online publications, as well as a book on education. Deeb is a real-estate investor and business owner with professional experience in human resources. She holds a Bachelor of Arts in English from San Diego State University.