The Summit

Beacon Hill Associates A publication of Beacon Hill Associates

A Closer Look at E-Recycling Businesses

The outlook for e-recycling businesses is positive, and the environmental insurance marketplace continues to be successful at addressing their pollution exposures

Over 95% of the adult American population currently owns a cell phone and over 119 million homes have televisions. And with children being required to do assignments on computers and tablets, electronic devices are becoming an important part of our lives at an early age. We rely on the convenience and portability of them, and many of us upgrade these gadgets on a regular basis. So what happens when they break or need to be upgraded? Where are they disposed of? A United Nations study reported that 53.6 million tons of e-waste was discarded in 2019, and only 17.4 percent of it was disposed of properly.

Electronics recycling centers are popping up around the country to provide a safe and responsible way to get rid of electric devices. By keeping these items out of landfills or unauthorized sites, some of the materials used to make electronics can be effectively sold and/or reused. E-recycling can incorporate anything from televisions, computers, and copiers, to refrigerators, microwaves, and other household machines. They are made with valuable materials including metals, plastics, and glass, which require energy and fuel to mine and manufacture. On the other hand, they may also contain toxic substances like lead and mercury which need to be handled carefully.

While recycling or reusing electronics can be seen as beneficial to our environment, there are several environmental exposures to understand and address at these recycling facilities.

Exposures for e-recyclers made include:

  • Heavy metals associated with electronic components. These could leach into soils/groundwater at the recycling site or at a disposal site such as a landfill. The insured could have an exposure from improper handling or storage of the waste at their site or improper disposal of the waste at a non-owned facility.
  • If the facility was involved in a fire, dangerous fumes or toxins from e-waste could be released into the atmosphere.
  • Improper sorting/packaging/labeling of hazardous or non-hazardous materials.
  • E-recycling facilities are generally located in industrial areas. These sites could be at risk for offsite contamination from a neighboring facility migrating onto the insured’s property.
  • Over the road spills of hazardous waste.
  • Much of this recycling takes place at warehouse facilities. If the site is not properly secured, there is the potential for theft or vandalism as the precious metals found in the e-waste are valuable.
  • Onsite storage of chemicals, any storage tanks, or generators used at the facility.

Infrastructure for the recycling of used electronics continues to expand, and more awareness and funding is being funneled into these efforts. Municipalities and waste management companies are seeing the opportunity in becoming involved with e-recycling operations, from a profit perspective and also an environmental standpoint.

Since recycling centers are considered “environmental facilities,” they require specialized insurance coverage. It is crucial that these insureds have a true understanding of their exposures relating to materials handling/storage, transportation, and their overall premises. The outlook for e-recycling businesses is positive, and the environmental insurance marketplace continues to be successful at addressing the pollution exposures at these facilities.

Information for this article was obtained from the following sources:

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