Gallagher (formerly OAMPS) has been ACAPMA’s insurance partner for more than 30 years.
As a specialist broker for the fuel industry and convenience stores sector, Gallagher handles a large number of claims on a monthly basis which can serve as a reminder to other businesses in the industry of the risks they face on a daily basis.
Gallagher’s latest incident report features some major claims events that are relevant to businesses of all sizes right across the sector.
Incident report Feb-April 2018
- An incident in VIC saw incorrect fuel provided to several earth-moving vehicles engaged on a work site. This caused 5 days’ downtime in the project and a considerable consequential loss claim. Fortunately, this type of incident is covered as standard through Gallagher’s Oilpac policy.
- We’ve regrettably seen two very nasty tanker incidents in NSW and QLD, which have caused three fatalities and necessitated extensive fuel clean-up operations. These events can be highly traumatic for tanker drivers, who, in extreme cases, may be unable to return to work.
- Rampaging gangs continue to cause havoc in the VIC service station and convenience stores sector – although the number of these incidents has eased up somewhat in recent months. Nevertheless, when they do occur they cause massive amounts of damage – often well in excess of $50-60,000 – usually for a few thousand dollars’ worth of cigarettes. Sadly we’ve had a number of multi-claim clients who have spent a fortune on risk mitigation but are still subject to attacks and have accumulated more than $200,000 in damage costs. This is placing upwards pressure on premiums across the sector.
- Several examples of clients leasing service stations without understanding if they’re responsible for environmental clean-up costs places a focus on getting professional advice on contracts before signing. People don’t seem to realise that they need an environmental audit prior to taking up the lease on a service station and a lot of heartache could be avoided through basic business management. All service stations will be contaminated to a certain extent. However, if you lease a site that has been there for 40-50 years and sign a contract that makes you responsible for clean-up costs the costs can be considerable – perhaps as much as $200,000. Re-tanking could add another $500,000 to that total. These sums are too large to be taking a chance on.
Emerging trend – franchisee agreements
Fuel industry contractual arrangements between franchisors and franchisees have been in the spotlight in recent months, with several examples of franchisees claiming they have been misled about the profitability of sites.
This issue is escalating and again highlights the needs for franchisees to be proactive and seek thorough legal advice before signing any agreements. There is pressure on franchisees to sign agreements and many worry that if they don’t accept the contractual terms provided that they will lose out. This can be a costly mistake, however, if you later find the site is not as profitable as claimed.
If you need advice on risk management and insurance for your business, contact Gallagher on 1800 572 145 or visit info.ajg.com.au/acapma to request more information on their range of insurance solutions for the sector.