Arthur J. Gallagher (formerly OAMPS) has been ACAPMA’s endorsed insurance broker for more than 30 years.

As a specialist broker for the fuel industry and convenience stores sector, Arthur J. Gallagher sees a large number of claims on a monthly basis which can act as reminder to other businesses in the industry to the risks they face on a daily basis.

They’re also able to identify trends relevant to a large proportion of businesses in the fuel and convenience stores sector.

Each month, AJG will provide ACAPMA with a brief incident report covering some high-profile claims and some emerging trends in order to give business owners a clear picture of the state of the wider industry.

Incident report April-May 2017

  1. A delivery error saw 30,000 litres of diesel fuel pumped into an unleaded tank to a sites across Victoria. Fortunately the error was picked up swiftly, although 8 cars were still contaminated with incorrect fuel.
  2. A burst water main in QLD caused serious water damage to a terminal and submerged the underground petrol tanks. Water contaminated one of the tanks and some of the product was on-sold to consumers before this was realised.
  3. Several ram raids have taken place on convenience stores and service stations in the Melbourne metropolitan area, with ATMs and cigarette stores targeted. The frequency of such events in Victoria is considerably higher than in other states and territories.
  4. A truck lost a load of fuel in a national park, requiring clean-up operations to minimise its impact. Fortunately the business was well insured and a swift clean-up response, which included the Environmental Protection Agency, prevented a serious incident.
  5. A number of high profile cyber-attacks have impacted the sector – in one instance banking transactions in excess of $2 million were diverted. Such security breaches highlight the need for businesses to follow correct procedures at all times to minimise their risks.

Emerging trends

  1. More cost-effective, top quality cigarette safes are entering the marketplace, offering convenience stores and service stations an affordable ram raid deterrent.
  2. Due to an increase in claims, the cost of management liability insurance and cyber insurance for the sector has sharply increased.
  3. There has been a spike in clients hiring sub-contractors who do not have sufficient insurance cover to be able to transport dangerous goods. This is a massive exposure for businesses. If in doubt, speak to an insurance broker who can carry out contract reviews.
  4. Workers compensation continues to be a considerable pain point for businesses in the fuel industry. Australia operates so many different schemes in its different states that cross-border activity is fraught with risk. A qualified insurance broker is your best bet to safely navigate the workers comp minefield.
  5. We’re seeing increasing examples of franchisees being placed into non-compliant retail sites, which are targets for WorkSafe or the EPA. It can be extremely costly for franchisees to repair and resolve these compliance issues – and could void their insurance in the event of a claim. We recommend franchisees exercise caution when entering into such arrangements.

Sound risk management and robust insurance programs should allow businesses in the fuel and convenience stores sectors to survive most of the incidents reported this month. And given that these incidents have the potential to impact pretty much any business in the sector, it places an onus on business owners and franchisees to make sure they have suitable insurance cover in place.

If you need advice on risk management and insurance for your business, contact Arthur J. Gallagher Insurance Brokers on (03) 9412 1688 or visit info.ajg.com.au/acapma to request more information on our range of insurance solutions.