Fuel carriers and distributors are subject to significant high risks — and incidents are not uncommon. Here we look at some fuel and dangerous goods industry insurance case studies with the potential to cause significant financial disruption to businesses without the right insurance program. Consider these examples and reflect on your risk and protections — how would your insurance respond?

The examples range from operational risks with dangerous goods to responding to a tax investigation and illustrate the need for industry specific insurance that covers a broad spectrum of risk scenarios.

1. Sub-contractor underinsured

A fuel company hired a sub-contractor to transport dangerous goods, but the sub-contractor did not have sufficient insurance cover to meet the regulatory compliance for carrying out the job — a huge exposure for the business, and one which highlights the need to carry out contract reviews through your insurance broker.

2. Fuel tanker spill calls for environmental damage response

Tanker accidents and fuel spills resulting from a collision can cause significant environmental damage and demand immediate corrective action. Gallagher Oilpac fuel industry insurance covers businesses for the costs of remediating environmental damage to the full indemnity limit, and provides emergency response teams, available 24/7, to help minimise the environmental impact, wherever it occurs.

3. Fuel plant fire caused interruption to operations

An equipment fault was responsible for a major fuel plant fire consuming a large amount stock, which resulted in the business suffering significant losses and profit declines for many months — but most of the additional costs were covered through the plant's business interruption insurance cover.

4. Service station transactions targeted by cyber attacker

A service station chain's banking transactions were hacked by cybercriminals who diverted in excess of $2 million before the breach was discovered. Lack of robust IT security measures can facilitate cyber security breaches, which can cause significant financial and reputational damage to businesses. Costs associated with losses of this type can be covered under a cyber insurance policy.

5. ATO focus on fuel industry brings unexpected costs

Australian Tax Office reviews of fuel sector businesses in Victoria and New South Wales involved the business in question significant costs to comply with tax investigations and audits. The average cost of preparing a response to an audit is estimated to be in the region of $25,000. Without tax audit insurance the business would have sustained a substantial unplanned for cost.

Our fuel and dangerous goods cover is based on industry experience

Created in cooperation with the fuel industry and based on 40+ years' experience in the sector, Gallagher Oilpac cover includes motor, liability and property exposures, plus additional endorsements and benefits including access to emergency response resources.

Talk to one of our industry experts about tailoring an insurance package for your fuel or dangerous goods business.


Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient's industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers' control.

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