Gallagher 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 which can serve as 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 May-June 2018

  1. Delivery of incorrect product caused a major manufacturing failure in VIC, and could be a costly claim. Sodium sulphate was accidentally delivered instead of sodium sulphide, highlighting the need to be vigilant at all times – even with regard to straightforward tasks.
  2. A fuel depot was forced to close for 1½ days following a spillage caused by overfilling a tank. In circumstances like this, it’s a requirement to contact the EPA, which the client did, and which resulted in the close-down for site clean-up. Again, suitable vigilance could have prevented this incident.
  3. A serious fuel discharge at a WA service station saw more than 50,000 gallons of fuel unaccounted for. Whether it was theft, faulty equipment or a slow leak remains to be seen, but such high levels of unexplained fuel loss are highly irregular given the requirement to monitor wet stock levels at all times.
  4. The Tasmanian floods in May highlighted the importance – and effectiveness – of sound risk mitigation processes across the service station sector. We had a number of clients who were severely disrupted by the 2016 floods, which saw several fuel businesses inundated with flood water. This was a wake-up call to the sector in Tasmania, and we’re happy to report no serious incidents from this year’s severe weather.
  5. A tanker was written off in a bizarre incident in a vehicle wash after it was damaged when accidentally reversed into a wall. This is the first incident of its type we have encountered!
  6. An incidence of credit card fraud in WA saw thousands of dollars of fuel purchased on a tanker driver’s stolen credit card. Had the credit card been immediately cancelled upon its loss being noticed this loss could have been avoided, highlighted the need for fuel businesses to ensure employees are aware of compliance requirements on matters like this.

Emerging trends

Long wait for replacement tankers

The fuel industry is booming, with product being sold at full capacity. But this has associated difficulties – notably the difficulty of sourcing replacement tankers. It’s not uncommon to have to wait 8-9 months for a replacement tanker, and that sort of delay could ruin a smaller operator, or see them having to sub-contract to major oil companies to make ends meet.

Gallagher’s Oilpac policy automatically provides $10,000 to cover enforced downtime, but in the case of long interruptions that’s not nearly enough. It is possible to cover 12 months of earnings through an insurance policy extension, but many buyers are unwilling to spend a few hundred dollars more to take this option. However, it would more than prove its worth in situations like this.

Overloading under scrutiny

We’re seeing increased prosecutions for vehicle overloading and failures of load restraints. A recent meeting we had with VIC Roads highlighted that this is a growing concern.

We’re doing what we can to educate our clients about this issue, because there’s no excuse for it. The maximum quad-axle load for transporting dangerous goods is 21 tonnes – which is six tonnes less than the 27-tonne limit for standard loads.

IBCs also need to be secured by two straps, but there has been a spate of prosecutions after IBCs were found to be secured with only one strap. Similar to overloading, there’s no excuse for this type of activity – accidental or not. Fines can be excessive and transport authorities are clamping down, so if you’re tempted to cut corners like this, we strongly urge you to reconsider.

Fewer raids in Victoria

As we reported in our previous incident report, the number of armed raids and ram raids on service stations in Victoria has declined noticeably, which is a very positive development for the sector. This can be attributed to excellent police work and closer monitoring of repeat offenders.

Although the threat has not gone away, we seem to be moving towards a position of greater stability for service stations in the state, which have been cruelly targeted by rampaging gangs for far too long. Indeed at the height of the crisis last year, we were receiving multiple notifications from service stations clients per day – with some stations being hit more than once in a single day.

Given how this trend has caused upwards pressure on premiums, we can only hope that a prolonged period of stability will go some way to redressing that.

If you need advice on risk management and insurance for your business, contact Gallagher on 1800 572 145 or visit to request more information on their range of insurance solutions for the sector.