Theft Prevention Guidance - Fuel Distributors
Published On : 28 Nov 2022
In recent years especially, rising fuel prices, changes in legislation, and shifts in day-to-day operations have all played a part in how fuel loss happens – and how companies respond. According to some reports, annual losses to UK delivery firms alone have now exceeded £100 million.[1]
Combined with rising diesel costs and theft rates increasing nearly 80% since 2023, it’s never been more important to protect your fleet.[2]
Understanding exposure
Fuel theft could lead to:
- loss of income
- storage system repair
- ·operational and customer service restrictions
- reputational damage
- environmental damage
Any fuel distributor or business with bulk storage could be at increased risk, and the cost implications are substantial. Therefore, it's worth taking time to understand the potential impact of fuel theft on your individual risk profile and take necessary preventative measures.
A theft damaging a storage system will lead to an immediate loss of revenue, plus the potential future loss of customers. It also opens a host of business exposures, which would be prudent to consider before the worst occurs, including:
- Holding a supply of spares and replacement parts
- Creating a business continuity plan
- Securing clients on rolling annual agreements
- Reviewing your security provisions at least annually
- Installing automatic shut-off valves
Similarly, consequent fuel leakage from the targeted storage system could result in environmental damage, which we have found to be costly in terms of clean-up and could be potentially hugely damaging to your reputation, especially if the depots are in or near environmentally sensitive areas. Would your current insurance cover impairment of your land?
Environmental damage
In our experience, environmental damage following a fuel theft is a significant risk, and ensuring the site remediation is carried out by suitably qualified and experienced spill response professionals can often lead to significant costs.
As with any claim, early notification of the incident to your insurers enables specialists with experience and expertise to help minimise the impact of the incident. The scheme we established (and the Petrochemical policies we now arrange with Pen Underwriting) includes a 24/7 Spill Response helpline, operated by a qualified DGSA who can help advise you on next steps, including a site visit if appropriate.
The reputational risk to your business is also potentially significant if handled badly, which is again why the Pen Underwriting policies include cover for crisis management costs, and access to experienced and expert advice on how to minimise the impact on your business.
Unusually too, the Pen Petrochemical Commercial Combined policy also includes cover for the cost of remediating your own site, in addition to the more conventional pollution cover for third-party sites.
Directors and company officers can also face legal pursuit by various stakeholders (including the Environment Agency) if a pollution event occurs. It’s worth noting that there hasn’t been a single EA prosecution when the 24/7 Spill Response team has handled the first response on more than 10,000 claims.
However, in the unlikely event that there is action (or you’re not insured via the Pen Petrochemical scheme) then directors are advised to ensure there is protection under their Directors’ & Officers’ (or Management Liability) policy for defence costs relating to pollution claims. These policies can also be arranged with Pen Underwriting.
Security: Invest to minimise risk
The primary objective for security should be to deter any prospective criminals, so you should ensure your sites:
- have well lit strong boundary defences that are devoid of trees/shrubbery
- carry out daily perimeter checks before closing
- have CCTV signage clearly visible on perimeter fencing
The next line of defence must minimise intruders' time on site via rapid detection and response. Alarms to detect intrusion, with motion-sensitive cameras covering the entire premises, are a sensible investment. The alarm system should be monitored by onsite security or an accredited remote video response centre.
Voice challenge is an effective method of leaving the thieves in no doubt that they have been spotted, and can often lead to thieves leaving empty-handed.
More widely, firms should invest in staff training on theft prevention, and basic DBS checks should be undertaken for all new employees. Lock up everything valuable, fit anti-theft locking caps on bulk storage tanks and limit the number of key holders. A security plan is only effective when it is well communicated and understood, with formal site access and internal/external reporting procedures.
How we can help
OAMPS Hazardous Industries has been working with the downstream fuel sector for more than 35 years, and can support clients with risk management and theft prevention advice, as well as insurance for the loss of fuel, property damage and business interruption resulting from the theft, along with environmental impairment, for both the business and defence costs for its directors and officers.
For more information, get in touch with the OAMPS HI team today.
Disclaimer
The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. OAMPS Hazardous Industries accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.
OAMPS is part of Pen Underwriting Limited which is authorised and regulated by the Financial Conduct Authority (FCA number 314493). Registered Office: The Walbrook Building, 25 Walbrook, London EC4N SAW. Registered in England and Wales. Company Number: 5172311.
