The Gallagher OilPac insurance concept has supported ACAPMA’s members for more than 40 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.

The latest Gallagher incident report features some major claims events and trends that are relevant to businesses of all sizes right across the sector.

Incident report Dec 2018–Jan 2019

  1. The fuel tanker fire near Wollongong in New South Wales that closed the Princes Motorway for a day on 3 January is the second similar incident in six months involving the same type of vehicle and the same sort of loss. Fortunately in each case the driver’s actions avoided a potential catastrophe. In both situations the OilPac emergency responder and the product provided have protected our clients. These highly dangerous tanker blazes serve as a reminder to our clients to ensure they are fully covered by insurance that will adequately meet a serious claim.
  2. An LPG gas leak in Port Fairy early in January resulted in the coastal town coming under threat of shutdown. Our client is the operator of the service station where the incident occurred, which is located on the main road. The customer’s vehicle responsible for the leak was an older model, one of many still operating on Australian roads that represent a hazard through lack of maintenance.
  3. We’ve also recently encountered two substantial fuel contamination incidents. In one case water entered a tank, causing damage to several customers’ vehicles. The other incident involved a delivery error which was quickly detected but resulted in substantial damage to product. Although the number if these incidents is reducing, the cost and reputational damage are still unacceptable.
  4.  Gallagher is pleased to report that owners and operators of retail businesses that sell cigarettes who have invested substantially in risk mitigation security measures have experienced a dramatic reduction in thefts – by 90% over 18 months for one Gallagher client. Although the initial cost can be daunting, in the long run this preventative expenditure is effective in saving costs, reducing premiums and protecting the wider community.
  5. Cyber threats have also fallen compared to three years ago, due to companies adopting more robust protection. Our clients are educating themselves in cyber security and working with IT providers to ensure their risk exposures are minimised. Cyber insurance policies have also evolved, with broader coverage and higher limits available, and some now making provision for risk mitigation programs.

Emerging trends

We have noted that there seems to be some confusion around product on consignment, with distributors giving work to sub-contractors who don’t have adequate insurance to cover the value of the load or the cost of spills and clean-ups, should an accident occur. Two important factors are involved: the fact that the consignor could be liable in an insurance claim, and the need to check that sub-contractors have the correct insurance cover.

Insureds in various industries who have a history of recent claims are being exposed to premium increases of between 20–40% – or in some cases being denied insurance cover – while those with positive records are in an advantageous position. This is a big issue for companies which are compliant operating businesses with insurance as one of their fundamental requirements.

An interesting development in the fuel market is the recent recommissioning of a biodiesel plant in Victoria – the first new biodiesel venture in recent years. This is worth noting because fuel prices are currently low and the recommissioning move comes despite this prevailing climate.

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.