Recycling and the Circular Economy

Key Risks in the Circular Economy

  • The The key risks for businesses operating circular economy supply chains encompass the following broad headings:
  • Physical risks e.g. fire, explosion, flood
  • Reputational e.g. unlawful dumping, modern slavery, pollution
  • People e.g. crime, civil wrong, health & safety breaches, breaches of fiduciary duty
  • Technology e.g. malware or ransomware attack, loss of data, breakdown
  • Financial risks associated with interruption to business e.g. following an insured loss, geopolitical event, terrorism, failure of interconnected supplier
 

Broad heads of risk requiring risk mitigation and insurance in the circular economy includes:

  • The movement of materials and equipment
  • Export/ import of recycled materials and recycling plant/ machinery
  • Construction and operational risks associated with recycling facilities
  • Environmental liability 
 
Broad heads of cover available includes:
 

Property Insurance – losses caused to physical assets

Liability insurance – awards and defence costs for claims made by third parties

Business Interruption insurance – loss of gross profit or revenue

Cargo insurance – loss or damage to goods in transit by land/ sea and air carriage

Management liability insurance (Directors & Officers, Employment Practice Liability, Corporate Liability) – awards and defence costs following a claim made against the firm or its directors & officers

Crime insurance – losses caused by crimes against the business perpetrated by employees and third parties

Cyber insurance – losses following a malware, or ransomware attack, loss of data following a breach of the system by a third party, reinstatement of data and restitution costs, reputation repair costs (PR), fines where not against public policy