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Petroleum Wholesaler Distributor Insurance Policy Information

Petroleum Wholesaler Distributor Insurance. Businesses and people in general rely on petroleum to operate their vehicles, heat their properties, and more. As one of the most reliable sources of fuel, petroleum is always in high demand.

Petroleum wholesalers receive petroleum products such as gasoline, diesel, fuel oil, and motor oil from refineries for distribution to retailers or other businesses. The product may come to the wholesaler by railroad tanker or truck and can be delivered in bulk or packaged into containers.

Bulk storage stations include tank fields with underground pipelines. The distribution center may be open 24 hours a day. Some wholesalers also own retail gasoline stations or convenience stores.

As a distributor or wholesaler of this product, you have a lot of responsibilities that need to be attended to. From ordering and delivering fuel to making sure that your employees are properly trained and all equipment is functioning properly, there's a lot of liability resting on your shoulders.

If anything goes wrong - damaged property, a petroleum spill, an injury - you'll be responsible for covering the cost of any necessary repairs, cleanup, medical bills, and so on. These costs can be prohibitive.

To avoid the crippling expenses that could potentially put your business in ruin, it's important that you invest in the right type of petroleum wholesaler distributor insurance coverage.

Petroleum wholesaler distributor insurance protects your business from lawsuits with rates as low as $87/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked petroleum wholesaler & distributor insurance questions:

• What Is Petroleum Wholesaler Distributor Insurance Insurance?
• How Much Does Petroleum Wholesaler Distributor Insurance Cost?
• Why Do Petroleum Wholesalers And Distributors Need Insurance?
• What Type Of Insurance Do Petroleum Wholesalers And Distributors Need?
• What Does Petroleum Wholesaler Distributor Insurance Cover & Pay For?

Why Do Petroleum Wholesalers And Distributors Need Insurance?

Though you try your best to make sure that everything concerning your business runs smoothly, you never know when you're going encounter a problem. Since you're liable for any issues that may arise, the cost of your financial obligations could be devastating.

If you're properly insured, however, when you do run into trouble, you'll have the financial security you need to cover the expenses; instead of paying for repairs, medical bills, legal fees, etc on your own, your insurance will pay such expenses for you.

In other words, petroleum wholesaler distributor insurance can help you avoid financial devastation. Not only that, but certain types of insurance are legally required; furthermore, having insurance assures your clients, employees, and anyone else that you work with that should something go wrong, your business has the funds to cover the expenses.

These are just some of the types of petroleum wholesaler distributor insurance coverage you should carry. You can carry individual policies, or opt for a commercial package policy that combines several different types of coverage under a single policy.

Petroleum Wholesale Distributor's Risks & Exposures

Premises liability exposures are limited due to the lack of public access to the storage facilities. If fuel is stored on the premises, fire, smoke, fumes, and vapors may spread to neighboring properties. There may be an attractive nuisance hazard with tank storage in the yard that must be controlled with fences and other barriers to prevent unauthorized access.

Contracts with transportation and storage providers may expose the operation to additional liability. Railroad sidetrack agreements pose additional concerns. If there is a railroad sidetrack or dock, an employee must verify that no one is in the path of an incoming or outgoing train.

Tanks, railroad tracks and conveyors can be attractive nuisances. The premises should be enclosed by fencing and other security to prevent vandals from entering the premises. "No Trespassing" signs should be posted.

Completed operations liability exposures are mainly due to misdelivery. The wrong fuel placed in a customer's tank has consequences ranging from inconvenience to tragedy as incorrect gasoline pumped into an airplane fuel tank will cause the plane to crash. The insured must have controls in place to monitor the fuels received from the refinery and delivered to customers.

Environmental impairment exposures are very high due to the possibility of tank leakage or spillage which can contaminate air, ground, or water. Spillage and leaking of pollutants can result in high cleanup costs and fines.

All tanks must meet EPA standards that include regular inspections and monitoring. Truck collisions and overturns can result in off-site environmental contamination. Drivers must be trained in and capable of performing needed and appropriate cleanup operations. If there are underground storage tanks, a UST policy will be needed.

Workers compensation exposures are high from the filling of tanks and trucks and the transport of petroleum. Fumes from the products can be toxic. There should be adequate ventilation, and safety equipment must be provided to employees. Employees can slip and fall due to product spills, or incur back injuries from lifting or dragging fuel hoses. Housekeeping is critical.

Drivers can sustain skin irritation and burns when loading and unloading. A driver can be seriously burned or killed if the vehicle overturns or explodes. Protective breathing equipment must be available for cleaning up leaks.

Drivers generally work alone, often after dark, and must operate in adverse traffic conditions such as inclement weather or road construction. Ergonomically designed seats can reduce back and leg injuries to drivers who sit in the same position for hours at a time. They must be monitored to ensure that an appropriate amount of time is allocated for sleep.

Property exposures can be very high. The petroleum distributor normally has extensive bulk storage facilities. Gasoline emits highly flammable fumes that must be controlled to prevent explosions. While underground tanks are the least prone to explosion, many tanks are above ground for environmental reasons.

Filling and dispensing fuel from the tanks can cause static electricity buildup that can lead to explosion unless the tanks are properly bonded and grounded. Petroleum products in containers for sale are less volatile as long as the containers are kept sealed and the temperature controlled.

Leak detection systems should be in place for tanks and other containers. Cleaning agents used to remove residue from tanks may be combustible. These must be properly labeled, stored, and separated. Greasy rags and equipment used to clean up spills could contribute to spontaneous combustion.

Smoking should be prohibited. Because electronic equipment and wiring can spark, it should be in conduit and maintained in excellent condition. Due to the high demand and cost of fuel, theft can be a problem. Alarms, guards, fencing and other security precautions must be in place as appropriate to the location.

Business income and extra expense exposures are high due to the lengthy time needed to rebuild the facility and install replacement tanks and equipment.

Equipment breakdown exposures include breakdown losses to the environmental control systems, electrical control panels, and other apparatus. Replacement parts may be difficult to obtain on a timely basis.

Inland marine exposures are from accounts receivable if the distributor offers credit to customers, computers for tracking inventory, contractors' equipment, goods in transit, and valuable papers and records for manufacturers' and customers' information. Duplicates must be kept of all data to permit easy replication in the event of a loss.

Contractors' equipment includes forklifts and hand trucks used to access and move stored items. Goods in transit are subject to theft and loss from collision or overturn, either of which could trigger an explosion if the transported goods are flammable.

Crime exposures are mainly from employee dishonesty. This operation involves a number of transactions and accounts that can be manipulated if duties are not separated. Background checks, including criminal history, should be performed on all employees handling money. There must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements.

Regular audits, both internal and external, are important in order to prevent employee theft of accounts. Most petroleum wholesalers use card lock systems for monitoring purposes. Physical inventories should be conducted at least annually.

Commercial auto exposures are high due to the delivery vehicles, which are large and awkward, and must be navigated over highways, rural winding roads, and congested city streets. Drivers must be trained in appropriate handling methods. They must have a valid commercial driver's license (CDL) for the trucks being driven and the cargo being moved.

MVRs must be run on a regular basis. Random drug and alcohol testing should be conducted. Multiple deliveries may be made during a single shift. Tankers often have compartments so that many different types of fuel can be loaded onto a single vehicle.

Drivers are responsible for loading and unloading the correct fuel into the tankers and at the customer's premises. Vehicles must be well maintained, with records kept in central locations.

What Does Petroleum Wholesaler Distributor Insurance Cover & Pay For?

Petroleum wholesalers and distributors can face various legal issues and potential lawsuits. Here are some common reasons for lawsuits and how insurance can help protect them:

Environmental pollution: Accidental spills or leaks of petroleum products can result in environmental damage, leading to lawsuits from affected parties, regulatory authorities, or environmental groups. Environmental liability insurance can help cover the costs of cleanup, legal defense, and settlements or judgments arising from these lawsuits.

Personal injury: If an employee, contractor, or third party is injured on the company's premises or as a result of the company's operations, they may sue for damages. Workers' compensation insurance can help cover medical expenses and lost wages for injured employees, while general liability insurance can help pay for third-party bodily injury claims, legal defense, and settlements or judgments.

Property damage: If the company's operations cause damage to third-party property, such as a storage tank failure leading to a leak, they may be sued for compensation. Commercial general liability insurance can help cover the costs of repairing or replacing damaged property, as well as legal defense and any settlements or judgments.

Product liability: If the petroleum products sold by the distributor cause harm to consumers, such as contaminated fuel damaging a vehicle's engine, the company may face product liability lawsuits. Product liability insurance can help cover the costs of legal defense, settlements, and judgments related to these claims.

Breach of contract: If the distributor fails to fulfill contractual obligations, such as not delivering the agreed-upon quantity of petroleum products, they may be sued by the affected party. Commercial liability insurance can help cover the costs of legal defense and any settlements or judgments arising from breach of contract claims.

Employment practices liability: If an employee alleges wrongful termination, discrimination, or harassment, the company may face an employment practices liability lawsuit. Employment practices liability insurance can help cover the costs of legal defense, settlements, and judgments related to these claims.

Errors and omissions: If the company is accused of providing negligent advice or service, such as incorrect information about the suitability of a petroleum product for a specific application, they may be sued for professional negligence. Errors and omissions insurance can help cover the costs of legal defense, settlements, and judgments related to these claims.

In each of these examples, having the appropriate insurance coverage can help protect petroleum wholesalers and distributors from the financial burden of lawsuits, allowing them to focus on their core business operations.

Commercial Insurance And Business Industry Classification

• SIC CODE: 5171 Petroleum Bulk Stations And Terminals, 5172 Petroleum And Petroleum Products Wholesalers, Except Bulk Stations And Terminals
• NAICS CODE: 423220 Home Furnishings Merchant Wholesalers
• Suggested Workers Compensation Code(s): 8018 Store - Wholesale - NOC

Description for 5171: Petroleum Bulk Stations And Terminals

Division F: Wholesale Trade | Major Group 51: Wholesale Trade-non-durable Goods | Industry Group 517: Petroleum And Petroleum Products

5171 Petroleum Bulk Stations And Terminals: Establishments primarily engaged in the wholesale distribution of crude petroleum and petroleum products, including liquefied petroleum gas, from bulk liquid storage facilities.

• Petroleum bulk stations and terminals-wholesale

Description for 5172: Petroleum And Petroleum Products Wholesalers, Except Bulk Stations And Terminals

Division F: Wholesale Trade | Major Group 51: Wholesale Trade-non-durable Goods | Industry Group 517: Petroleum And Petroleum Products

5172 Petroleum And Petroleum Products Wholesalers, Except Bulk Stations And Terminals: Establishments primarily engaged in the wholesale distribution of petroleum and petroleum products, except those with bulk liquid storage facilities. Included are packaged and bottled petroleum products distributors, truck jobbers, and others marketing petroleum and its products at wholesale, but without bulk liquid storage facilities.

• Butane gas, except bulk stations and terminals-wholesale
• Crude oil, except bulk stations and terminals-wholesale
• Fuel oil, except bulk stations and terminals-wholesale
• Fueling services, aircraft-wholesale
• Gases, liquefied petroleum: except bulk stations and
• Gasoline, except bulk stations and terminals-wholesale
• Gasoline: buying in bulk and selling to farmers-wholesale
• Kerosene-wholesale
• Lubricating oils and greases-wholesale
• Naphtha, except bulk stations and terminals-wholesale
• Petroleum and its products, except bulk stations and
• Petroleum brokers-wholesale

Petroleum Wholesaler Distributor Insurance - The Bottom Line

Not all petroleum wholesaler distributor insurance polices have the same limits, exclusions and coverages. If you are shopping for commercial insurance, or want makre sur your policy fully protects your operations, speak to an experienced broker to take a look at your business.

In many cases they can save you premium dollars and offer you better policy options than you currently have.

Additional Resources For Wholesale And Distribution Insurance

Read informative articles on wholesale distribution insurance. Distributors and wholesalers face specific risks including fire, flood and weather damage that can destroy products in the distribution center - and every part of the supply chain including late supplier shipments to unpaid invoices - can effect the entire operation.

• Air Conditioning And Heating
• Audio And Video Equipment
• Beer & Ale
• Beverage
• Cabinets
• Cameras & Musical Instruments
• Candy
• CDs, DVDs And Videos
• Clothing
• Coffee
• Confectioners
• Dairy Products
• Drugs
• Dry Goods
• Electrical Appliances
• Electrical Equipment
• Electrical Supplies
• Electronic Equipment
• Envelopes
• Extracts
• Food
• Fruit
• Fur
• Furniture
• Gifts
• Glassware
• Greeting Cards
• Grocers
• Hardware
• Importer & Exporter
• Jewelry
• Lamps
• Liquor Wholesaler
• Lumber
• Manufacturers Representative
• Meat
• Motion Picture
• Novelties
• Paint
• Petroleum
• Plate Glass
• Plumbing Supplies
• Restaurant Equipment
• Roofing Materials
• Rugs
• Seed Merchants
• Shoes
• Stationers
• Theatrical Supplies
• Tires
• Tools
• Toys
• Wallpaper
• Wholesale Florist
• Wholesaler Distributor
• Specialty Dealers And Distributors

The wholesale distribution industry plays a crucial role in the supply chain process, connecting manufacturers and retailers to customers. It involves the storage, transportation, and distribution of a wide range of products, including raw materials, finished goods, and equipment.

Wholesale and distribution operations have many of the same physical damage and property coverage concerns as warehouse operations. In both, the value of both real property and stocks of merchandise is very high. Loss control and other techniques appropriate to the types of merchandise involved are needed. For these reasons, adequate and appropriate property insurance coverages are important.

As with any business, the wholesale distribution industry is exposed to a variety of risks that can impact its operations and profitability. These risks can range from property damage and theft to liability claims and employee injuries.

Business insurance helps to protect a wholesale distribution company from these potential losses by providing financial protection in the event of unexpected events. It helps to cover the costs of repairs, replacements, and legal fees, as well as lost income and wages.

For example, if a warehouse fire destroys a large portion of a wholesale distributor's inventory, business insurance can help to cover the cost of replacing the lost goods and repairing the damaged property. Similarly, if a customer is injured on the company's premises, liability insurance can help to cover the cost of legal fees and settlement payments.

In addition to protecting the company's assets and financial stability, commercial insurance also helps to protect the company's reputation. If a company is sued or faces a major loss, it can damage its reputation and credibility in the industry. Business insurance helps to mitigate these risks and maintain a positive reputation.

Overall, the wholesale distribution industry needs business commercial insurance to protect against unexpected risks and losses, maintain financial stability, and protect the company's reputation. Without it, a company may face significant financial losses and potential legal liabilities that could impact its operations and profitability.

Minimum recommended small business insurance coverage: Business Personal Property, Business Income and Extra Expense, Accounts Receivable, Computers, Contractors' Equipment, Goods in Transit, Valuable Papers and Records, Employee Dishonesty, General Liability, Employee Benefits, Umbrella, Business Automobile Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation

Other commercial insurance policies to consider: Building, Earthquake, Equipment Breakdown, Flood, Leasehold Interest, Real Property Legal Liability, Signs, Computer Fraud, Forgery, Money and Securities, Cyberliability, Employment-Related Practices and Stop Gap Liability.