But (without wishing to disturb your sleep!) what if it's not a sudden disaster that befalls you, but something that has been there all along. Same potential disaster, different speed.
Andrew Dix, partnerships and development manager at OAMPS, which describes itself as one of the UK's largest insurance brokers, says many companies use the same type of "bog standard" insurance policy, whatever their business. Your service station, for example, could have the same elements of cover included as an office block. Specialist operators, such as forecourts, have to squeeze their 'specialisms', under the standard headings. For example, do canopies and structures come under 'buildings' or 'machinery and plant'?
"A standard insurance policy will provide you with 'sudden and unforeseen pollution risk'," says Dix. Great if you have a sudden underground tank failure, or spillage.
"But what happens when a site has maybe been leaking over a period of time, or maybe producing some sort of land pollution, just through the site in general, because it's been used for so long?" Errrm.
This kind of concern often rears its ugly head at a critical point in the sale of a service station, when the buyer could use the lack of appropriate cover or pollution audit, as an unpleasant bargaining tool.
Recognising a gap in the market, OAMPS, which already works within the forecourt industry, has recently launched a specialist policy for fuel retailers, called Forecourt First. "The policy gives two levels of cover," explains Dix. "One is for the tanks; the other is a long-term legacy policy for the whole site, using our in-house environmental specialist company OHES. "The long-term policy would require land and geographical surveys to qualify, and the initial investment is quite significant, but so are the benefits."
example of forecourt first cover
Scenario: A large fuel distributor in the East Midlands was notified by the regulatory authority of a significant release of petroleum from one of its forecourts. The release of petroleum was identified during development activities on an adjacent parcel of land. The petroleum distributor faced extensive investigation to determine the degree of soil and groundwater remediation required to clean the site to a standard acceptable to the regulatory authority.
Product: The fuel distributor had bought Premises Pollution Liability (PPL) cover for all petrol stations under its ownership. The cover gave an incident limit of £5m with a policy aggregate of £10 and a self-insured retention (SIR) of £25,000. The cost of the policy was passed on to the tenants as part of their tenancy agreement.
Claims Management: The claims team assisted the insured in appointing a qualified environmental consultant, who designed a programme of intrusive investigation and assessment works. The investigation works and subsequent Quantitative Risk Assessment (QRA) demonstrated that the identified contamination did not represent a significant risk to nearby controlled waters, as first thought. As a result, a less rigorous Remediation Action Plan (RAP) was agreed by the regulatory authority, which allowed some contamination to remain in-situ. The rapid response of the claims team not only avoided unnecessary remediation costs, but also prevented the site from being registered by the regulatory authority as 'contaminated land' and reduced business interruption. The petroleum distributor's PPL policy responded to meet the cost of investigation and clean-up, which amounted to approximately £325,000.