September’s terrifying Drysdale service station fire was a bleak reminder to all businesses in the fuel retail sector of just how swiftly disaster can strike.

Eight trucks, including six fuel tankers, and hundreds of LPG cylinders exploded in the massive overnight blaze on 7 September, which led to 50 nearby homes being evacuated.
Thankfully there were no injuries, but Grant Stillman, a fuel sector insurance expert from Arthur J. Gallagher, says the incident should serve as a wake-up call to the wider industry.
“A fire at a service station is difficult to contain, presents an enormous threat to personal safety, and can cause extensive property and environmental damage,” he said. “The Drysdale incident shows just how quickly a business can literally go up in flames. That’s why it makes sense to be prepared and minimise risks as much as possible.”

Containing the risk
Fires at premises can be caused by numerous circumstances outside business owners’ control, such as:
• static electricity build-up from clothing or floor covering
• faulty equipment or machinery
• smoking where there is fuel vapour in the air
• a faulty electrical power point on the premises
• a customer using a battery operated device while near the pump

Taking steps to manage and minimise the risk is therefore vital, and some sensible measures include:
1. Ensuring your service station and convenience store are regulation compliant in terms of how much flammable or combustible fuel is stored onsite
2. Maintaining forecourt and filling facilities to standard
3. Keeping firefighting equipment such as extinguishers readily accessible.
4. Keeping foliage around the premises cleared or trimmed back
5. Educating all staff in safety practices

“Staff education is critical,” said Grant Stillman. “All staff should be trained in tank dipping and tanker discharge processes, and procedures such as the emergency and evacuation plan.
“The emergency plan should include a detailed map of the premises, after-hours and specialist response contacts, and protocols for dealing with fire, injury and product spillage.”

Liabilities
Because a service station is a public space, employs personnel, has specialised assets and equipment, and stores quantities of contaminants, it presents multiple exposures in terms of insurance cover.

These include but are not limited to:
• personal injury ‒ operators need insurance cover for their staff as well as members of the public who may sustain injuries in a fire
• business interruption ‒ be realistic about how long you could be out of business in a worst case scenario and be sure this period and resultant loss is reflected in the terms of your cover
• replacement of buildings and equipment ‒ it is critical that replacement valuations are current and comprehensive enough to cover the entire operation
• environmental contamination and clean-up ‒ be aware that this could be extensive and expensive

“In the case of major fires, having the right level and type of insurance cover is critical,” said Stillman. “Just look at the Drysdale fire. The business will take months to get back on its feet and will suffer from a significant loss of income.
“If you work in the sector it’s important to ask yourself how you’d manage in the event you were unable to trade for weeks or months. Would your business survive? That’s why your insurance program needs to be robust enough to help you bounce back from any insurable event – including fires.
“Any business in this sector who isn’t seeking expert advice on their insurance program from a specialist broker is putting their livelihood at risk.”

Talk to an expert
Gallagher has more than 40 years’ experience with the fuel transport industry and is ACAPMA’s insurance partner.
Need advice on the right insurance for your fuel or convenience store business? Then find your nearest Gallagher expert by calling 1800 572 145. Alternatively request more information online at info.ajg.com.au/acapma