Fuel Oil and Propane Dealer Insurance



With the current challenges of heating oil and coal, many homes and businesses are moving toward natural gas, propane or alternative energy sources to mitigate their heating expense.


With new areas of operation come new risks that many business owners never consider. I assist my clients in identifying the risks associated with these newer energy sources and I have resources and experts in the industry to help with the transition.


Aging external above ground storage tank problems.

Even with the push towards more efficient sources of energy, heating oil should be around for at least the next twenty to forty years.  Aging tanks with faster off-loading pumps on delivery trucks create a problem with over pressurization and splitting.  Now more than ever, fuel dealers need to be proactive with tank and pipe inspections, suspending filling tanks and systems that are corroded, full of sludge, or showing signs of significant wear.   


A great third party vendor to help you with aging oil tanks is TankSure.  To know more about their program and how it can help prevent tank splitting or failure, check their website at www.tanksure.com.


Heating oil weighs 8 pounds per gallon.  When the homeowner asked for 200 gallons of heating oil, the tank supports could no longer handle the 1600 pounds inside the tank.  Luckily it fell against the home.  When these fall away, the heating oil employee is typically injured trying to disconnect hoses or hold the tank up to keep it from spilling.


This tank has no ability to keep condensation from behind or below the tank.  Proper tank installation should allow air to circulate around the tank.  Tanks elevated a few inches from the ground allow anyone to visually inspect the integrity of the tanks since the bottom is first to corrode and leak.


Over the road fuel inventory.

Typically, an unendorsed insurance policy only covers the fuel stored at named locations on an insurance policy and gives a nominal limit of property in transit.  This leaves energy dealers under-insured when transporting fuel to a customer’s location.  I provide blanket fuel in transport coverage equal to the greatest loss a client could encounter.  


Depending on the type of fuel hauled, per truck limits range between $20,000 and $50,000.


Propane Operations.

Although propane is an excellent fuel for heating where natural gas is not available, it poses serious fire and explosion issues for users.


On July 23, 2014, this home located in York County, PA exploded from propane filling the basement of the home.  It ignited when the water heater boiler started.  Luckily, no one was home at the time of the blast.  A pin-hole in the line from the external tank to the furnace was the cause.


The key to a safe and successful propane business is having proper and immediate response to customers that call in claiming they smell gas or they have no gas for heat or cooking.  I recommend that all employees have “out of gas” response training and should be an emergency statement available to read over the phone when required.


My clients are successfully managing their propane exposures when they use our endorsed third party safety and risk management provider named P3, by Boston Environmental.  Not only do they help with the annual “Duty to Warn” requirements, but give the resources to create consistent plans and procedures to protect their customers from leaks and explosions.


I’ve done extensive training with my clients on the factors that lead to propane accidents.  Rather than just going through the rules, I played a video of a mock trial between a plaintiff’s attorney and propane delivery employee.  The discussions created great dialogue between management, field personnel and office staff and I know of one major potential accident that was avoided due to the training.


Distracted driving.

Distracted driving will soon overtake heating oil spills as one of the costliest and most frequent claims facing energy supply companies.


Here are some great ways to manage this risk:

  • A written policy prohibiting cell phone use, eating, or even GPS resetting while the vehicle is in motion. 
  • Employee training.
  • A written discipline policy for non-compliance.  The policy must be strictly followed.