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U Can Be Insured
Following the rules pays off for peace of mind, and insurance.
Paying attention to the way your self-service yard is laid out not only helps to attract customers but it makes a huge difference when it comes to insuring your business. With self-service yards, insurance is geared more towards the liability of patrons than for employees. This is typically because when the dismantling of    vehicles is not done by employees, but instead your customers are pulling parts off the vehicles – you are exposed to a very different set of safety concerns.

“There’s a misconception out there that self-service yards cannot be insured,” said Bill Velin, of the ARA-endorsed Wells Fargo Business Insurance company. “Historically it has been more difficult to get insurance for a u-pull-it due to the potential safety risks to the customer. The criteria for insuring them are more numerous and stricter than for full-service yards, but nevertheless it can be done. Our experience has been that if all the criteria are met, it becomes a very controllable insurance risk.”

You can begin to meet the criteria for insuring a self-service yard by looking at your yard design.  Bearing in mind that you have customers taking parts off vehicles, look for potential safety hazards. It is imperative that you have a well-designed yard that leaves walkways free of clutter so customers will not trip or fall. Cars should be placed close enough to the ground so that parts will not fall out onto a customer as he or she tries to take out a part.

“Self-service facilities have more exposure to something going wrong because you have the customers taking parts out of vehicles,” said Velin. “Patrons will use actual car jacks to try to pull a part out and if the car isn’t low enough to the ground, the car could fall on them and you’ve got a huge liability claim. It’s a good idea to let the customer know that, ‘if you want a part pulled, call for our help, and we’ll get employees using a tripod to pull it for you.’ It might take more effort on the part of the employee, but it will greatly reduce the risk of a customer doing something incorrectly and hurting himself.”

In addition to the vehicles being low to the ground and set on a stable base to prevent working under the cars, the processing area for cars should be separate from the area where customers will be. All fluids should have already been drained from the vehicle before a customer even gets to touch it.

Evaluating the Facility

According to Velin, the insurance industry uses a basic supplemental questionnaire to look at the criteria that a self-service yard must meet before it will underwrite a policy for that yard.“

Over the past 20 years we have refined our supplemental questionnaire, using the criteria we found effective and eliminating the ones we didn’t,” said Velin. “In addition to meeting the criteria that all yards must meet, we have added some specifically geared for self-service yards.”

Criteria that all yards must meet include:
• Premises must be fenced – with a real fence and not just stacked cars.
• Proper removal and storage of flammable fluids.
• All tow trucks must be compliant with the safety and equipment standards set by Department of Transportation.
• Cutting and welding areas must be free of all combustibles.
• Ongoing training in all these areas.

Criteria specifically geared towards self-service yards:

 YARD
• No customer cutting or torching equipment allowed in the yard.
• No customer tools or hydraulics allowed.
• Only manual tire removal tools allowed – no pneumatic tools.
• All wheelbarrows used to haul parts must be supplied by the yard and be in sturdy condition.

 PROCESSING OPERATIONS
• All processing areas (draining/crushing operations) are off limits to customers.
• All vehicles accessible to customers must be drained of fluids such as gasoline, oil, anti-freeze, etc.
• No smoking allowed anywhere in the processing area or nearby buildings.

 SETTING OF VEHICLES
• Vehicles must be on stable jacks or wheel stands to prevent customers from working under vehicles.
• Yard walkways should be free of debris to prevent customers from tripping and falling.

 SAFETY POLICIES
• All customers must be at least 18 years old.
• No drugs or alcohol permitted on premises.
• All customers must sign a waiver and present a valid driver’s license.
• All waiver forms should be available in both English and Spanish.
• All tool boxes should be checked before customers are allowed in yard.
• All yard policies should be clearly displayed for customers to read.

As with full-service yards, having a good safety program in place is critical. Not only should you have a safety policy for the customers but you must also have a safety program for your self-service employees. These include incentives to reduce worker compensation claims and hiring the right people in the first place. (If you missed the last issue of Automotive Recycling magazine, check it out on ARA’s website to find more on how to implement a successful safety program for your yard.)

Incentivizing Safety

Many yards successfully use incentive programs, says Velin, and he says it can help to create a safety conscious mentality in employees.

“A lot of people will put incentives out there for their employees to reduce the amount of worker compensation claims,” said Velin. “Some of the ideas include giving an extra $25 per month if you have no claims, entering your name in a drawing to go on a paid vacation, giving out something like a belt buckle if the company is loss free for three months, or jackets if company is loss free for six months.  Another idea is to put an employee’s name up on a plaque if he is injury free for a year.

All of these ideas help to get employees on the lookout for unnecessary claims and doing their part to ensure the safety of the workplace.”

If all the criteria is met and the past loss experience is good, then there are several insurance carriers that will insure a self-service yard.

For more information on insuring a self-service automotive recycling facility, contact Bill Velin at Wells Fargo Business Insurance. He can be reached by e-mailing Bill.Velin@wellsfargo.com, or via phone at 800-328-6311, ext. 3039.

Michelle Keadle-Taylor is a freelance writer based in Northern Virginia.

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