Legal risks in the waste hauling industry are rising sharply, threatening the very existence of many companies. With insurers pulling back and hefty verdicts becoming commonplace, even minor accidents can lead to catastrophic financial consequences.
A recent report highlights how social inflation and aggressive legal tactics, like third-party litigation funding, have made large jury awards more frequent. Where settlements once totaled in the hundreds of thousands, they now often reach into the millions. Many waste haulers are operating with minimal insurance coverage, putting them at significant risk. Some companies still only carry the minimum required by law, even as claims related to fatalities can soar to $7 million or more.
Matt Andrews, a senior managing director at Amwins Program Underwriting, notes that a sympathetic jury can lead to awards far exceeding the actual damages. The situation is especially concerning in areas like Dallas, where personal injury attorneys aggressively market their services, often highlighting potential payouts.
For brokers and clients, this situation serves as a wake-up call. Without skilled drivers, strict safety protocols, and sufficient insurance, a single accident could spell disaster for a company. Many waste haulers find themselves underinsured, even as the severity of claims continues to escalate.
Andrews points out that many companies are choosing to limit their coverage due to costs. They might select policies that fall short of what they would need to cover severe claims. For instance, a fatality that could have cost a million dollars a decade ago now has no upper limit.
The retreat of insurance carriers from the waste hauling sector exacerbates the problem. With fewer options and rising premiums, many brokers struggle to find adequate coverage. Some companies are opting to meet only the minimum state requirements, a choice that could jeopardize their assets in the event of a significant claim.
Operational failures are also contributing to the increasing frequency of claims. Poor hiring practices, insufficient training, and a lack of oversight have become common issues. Andrews emphasizes that the quality of drivers is crucial for preventing losses. Companies that prioritize vehicle maintenance and driver safety will have better risk profiles and more insurance options.
Education and transparency are vital for waste haulers. Andrews encourages open discussions about the risks of cutting corners in operations. The combination of operational shortcomings, inadequate insurance, and an unforgiving legal landscape puts many waste haulers at risk of going out of business.
Overall, the waste hauling industry faces a challenging environment. With rising legal risks and shrinking insurance options, companies must take proactive steps to ensure their operations are safe and their coverage is adequate.