PETROL and oil distributors, filling stations and forecourt operators are unique in the way they operate, and the environment in which they operate is unlike any other retail premises.
A forecourt’s sole purpose has evolved from simply re-fuelling a vehicle, and this is no longer their main source of profit. Many have become scheduled stops en route to a destination, with a high number featuring mini supermarkets, fast-food outlets and children’s play areas on site.
Forecourts and filling stations are subject to those risks experienced by most businesses - such as property damage, flooding and theft. However, due to their varied nature and high customer dwell-time, they are also susceptible to more specific dangers.
Fires and explosions associated with the storage of fuel, the risks associated with the misuse of air compressors, the ill-effects of pollution and the various hazards that arise as a result of high footfall and moving vehicles, all have serious consequences which must be mitigated against via an appropriate insurance and risk management solution.
When a fuel provider or a company working within the forecourt industry is out of business for an extended period of time, customers can quickly change their refuelling habits.
This shift of loyalty to another provider can be extremely challenging to recover from, leading to financial difficulties which may be felt long after trading resumes.
Alongside the obvious financial protection, obtaining the correct insurance also offers owners and managers working in such an unpredictable environment, greater peace of mind, so that they can focus on what really matters without distraction.
The impact of pollution on a business is a unique issue, one which is often overlooked by forecourt operators. Public liability cover typically insures a business against compensation claims and legal costs if a third party suffers injury or property damage while on the company’s premises.
Pollution itself however, is not typically an insured peril and therefore, in the event that a substantial leak within the premises of a forecourt results in business closure for an extended period of time, loss of revenue may not be covered under the business interruption section. Any resulting clean-up costs and fines may also not be covered.
Environmental impairment liability (EIL) insurance is a solution which should be considered by companies of this nature. EIL offers cover for risks associated with pollution and also includes cover for first and third-party clean-up, bodily injury and property damage.
The forecourt industry has often found the insurance sector difficult due to a number of insurers regularly entering and exiting the market, offering late terms and limiting the options available to the operator.
Ensuring that there is an experienced broker on hand to present this information to insurers correctly can be vital for a business to obtain new or better terms, and will ensure that a tailored solution is put in place that meets the specific needs and requirements of the business.
:: Richard Willis is managing director at Willis Insurance and Risk Management
