August 2025
Climate change is no longer a future problem – it’s happening now! Rising temperatures, stronger storms, and wildfires are affecting businesses everywhere. For companies that make and recycle wooden pallets, these changes bring new risks, and new responsibilities.
At the same time, many of these companies are starting to use “green practices” to protect the environment. These changes can also affect their insurance needs and costs. Let’s look at how this impacts four types of insurance: workers’ compensation, general liability, property, and cyber insurance, and how pallet companies are responding.
1. Workers' Compensation Insurance
Workers’ compensation insurance helps cover medical bills and lost wages if an employee gets hurt on the job. In the wooden pallet industry, workers often use saws, nail guns, forklifts, and heavy machinery. Add in extreme heat or smoke from wildfires, and the risk of injury or illness can increase.
Climate Risk:
Longer, hotter summers are raising concerns about heat-related illnesses. Working in hot, enclosed warehouses or outdoor yards without proper cooling can lead to dehydration, heat stroke, or exhaustion.
Green Practice Example:
Some pallet companies are installing solar panels to lower energy costs and power better ventilation and cooling systems. Others are switching to electric forklifts, which create less heat and improve air quality in indoor workspaces. These changes can lower the chances of worker injury or illness and help reduce insurance claims, which may lead to lower premiums over time.
2. General Liability Insurance
This type of insurance protects companies if they are blamed for injuries or property damage to others, like visitors or customers. In a changing climate, companies may face lawsuits related to air pollution, runoff from their property, or even environmental damage.
Climate Risk: Wildfires, floods, or heavy storms could cause pallet debris or smoke to affect neighboring businesses or properties. A fire caused by poor yard maintenance or faulty equipment could spread quickly in dry conditions, causing major damage.
Green Practice Example:
To reduce risk, many pallet companies are improving their yard layouts by keeping tighter control over wood waste, installing firebreaks, and investing in automated sprinklers. Others are using biodegradable chemicals and safer adhesives to lower the chance of chemical runoff. These steps may help reduce liability claims and show insurers that the company is being proactive, possibly leading to better coverage terms.
3. Property Insurance
Property insurance covers damage to buildings, equipment, and materials. For pallet companies, which often work in large warehouses and outdoor yards full of flammable wood, this is a major concern.
Climate Risk:
Extreme weather like wildfires, floods, and windstorms are becoming more common. If a warehouse is hit by a storm or fire, losses can be huge. Rising insurance costs or limited coverage are growing concerns in high-risk areas.
Green Practice Example:
Some manufacturers are making their facilities more climate resistant. That includes using fire resistant roofing and siding, elevating equipment in case of floods, and installing temperature and humidity control systems to protect stored pallets. Companies are also trimming tree lines and clearing excess wood to reduce fire fuel. These actions can not only prevent damage but may also qualify the company for discounts on property insurance or make it easier to get coverage.
4. Cyber Insurance
Cyber insurance protects businesses from digital risks like hacking, ransomware, or data breaches. This might not seem related to climate – but think again.
Climate Risk:
As companies go green, they’re also becoming more high-tech. Many are using digital tools to track inventory, manage recycling programs, or monitor energy use. These systems are great, but they can also be targets for cyberattacks.
Green Practice Example:
Pallet companies are now investing in better cyber security. That includes strong firewalls, regular employee training, and data backups. Some are working with cloud-based systems that offer real-time monitoring and faster response if there’s an issue. By reducing the risk of a cyberattack, companies may be able to lower their cyber insurance premiums or avoid big losses from system downtime.
Looking Ahead: Insurance as a Partner in Green Change
As the climate continues to shift, insurance companies are starting to reward businesses that prepare for risks and take green action. In the wooden pallet industry, that means:
Replacing older machinery with electric or energy-efficient models
Creating detailed disaster response and evacuation plans
Training employees to spot climate-related risks
Partnering with local fire departments and emergency planners
Investing in smarter, safer, and cleaner production systems
When a pallet company takes steps to reduce its impact on the environment, it often also reduces its exposure to risk. Insurance providers take notice of this. A company with a solid green plan may be seen as a lower risk and can sometimes negotiate better terms, lower deductibles, or even new types of coverage.
Final Thoughts
Climate change is here, and it’s reshaping how wooden pallet manufacturers do business. But with change comes opportunity. By adopting green practices, these companies can not only help the planet, they can also protect their workers, reduce damage, prevent lawsuits, and strengthen their digital defenses.
Best of all, they may find that their insurance coverage gets better – and more affordable – as a result.
How Climate Change and Green Practices Are Changing Insurance for Pallet Companies