We all know business costs are spiralling out of control but the one cost you should not scrimp on is insurance.
However, some forecourt operators are too hung up on price. Peter Jackaman, founder of JackaMan Insurance Services, says: “Some owners don’t consider the quality of the product or the quality of the insurer. You do get rogue insurers and some people ignore the signs just to get a lower price.”
Niraj Mamtora, director at Forum Insurance, agrees: ‘Cheaper premiums often mean lower levels of cover, higher excesses, or more exclusions – which only become clear at claim time.”
Both Jackaman and Mamtora believe forecourt owners need specialist advice. They would say that, wouldn’t they, you might think – but it does make sense.
“Getting insurance for a forecourt is not as straightforward as insuring a standard retail premises. Because of the specialist risks involved, such as the storage and dispensing of fuel, insurers require a deep understanding of the operations before offering terms. That’s why working with a broker who has sector-specific experience is crucial,” says Mamtora.
“The devil is in the detail when it comes to insurance,” says Jackaman. It’s all about the policy wording and schedule, and it’s an expert that can get you the best cover possible.”
The two experts agree that one of the costliest mistakes petrol station owners make is under-insuring their business.
“One of the biggest issues we see is underinsurance — especially when it comes to rebuild costs or business interruption cover,” explains Mamtora. “Many operators simply renew policies without reviewing the sums insured, which can be a costly mistake if there’s a serious incident. Others may overlook key areas like cyber cover or environmental liability, assuming their base policy includes it — when often it doesn’t.”
Jackaman adds: “Sometimes the PFS owner guesses the value but if their site burns down they need to take into account things like debris removal. If you under insure by 20%, the payout will reflect that. It’s best to get your property valued to ensure it is adequately insured.”
Mamtora says another key issue is the rising cost of claims, especially environmental clean-up and rebuilds, driven by inflation and regulatory pressure. “Many operators haven’t adjusted their insurance to reflect this — leaving them at risk of shortfalls during a claim.
“Additionally, cyber threats are an emerging risk. As more sites adopt connected payment systems, epos integrations and remote monitoring, they become vulnerable to cyberattacks. Cyber cover is still often overlooked in this sector, but it’s becoming essential.”
Renewal time
When it comes to renewal time, Jackaman says some operators shop around for the cheapest while others stick with their existing insurer.
Mamtora recommends that owners get a full insurance review annually rather than just auto-renewing.
He says owners should:
• Insist on a rebuild cost assessment to avoid being underinsured on buildings.
• Check environmental liability cover — clean-up costs can be huge and are not always included.
• Ensure business interruption cover is realistic — consider how long you’d be out of action.
• Review liability limits — especially if you have third-party contractors or high footfall.
• Work with a broker who knows the forecourt sector — not just a generalist.
Meanwhile, JackaMan Insurance Services is an associate member of the PRA and offers PRA members a free healthcheck on their insurance.
“Basically they send me their insurance schedule and I will comment on it,” says Jackaman.
The most regular insurance claims from forecourts concern slips and trips. That could be because someone has tripped on a manhole cover or slipped on fuel on the ground or tripped or slipped inside the shop.
Jackaman says this is why operators need to make sure their health and safety protocols are kept up to date.
Other, less common occurrences include vehicles driving into pumps. He says car wash damage is always a contentious issue but if two or three people say their cars have been damaged, it will need looking into.
Type of cover
Mamtora outlines the different types of cover that should be considered for a forecourt:
• Property cover – The most valuable parts of your site (convenience store building, fuel pumps, underground storage tanks, canopy, electrical chargers and other vital infrastructure) all need to be insured with the correct coverage levels and insurance extensions.
• Employers Liability cover – This is a legal requirement in the UK, it provides compensation for your employees if they are injured as a result of working for you.
• Public Liability cover – this covers you against a third party claiming against your business when their property, vehicle gets damaged or they themselves are injured. T
• Product Liability cover – When a customer fuels up at the forecourt and their vehicle breakdowns less than a mile away it can often be due to contaminated fuel. This occurs when underground fuel tanks have been compromised with dirt or water seeping in. Depending how busy the forecourt is, it can be days before the issue is notified to the forecourt, this can mean 100s of customers can be impacted. This isn’t a standard cover so it could cost you a hefty sum without the correct policy.
• Environmental Liability cover – When fuel leaks into the ground around your site not only do you lose the fuel stock you have paid for, but there are large liability claims that arise. Without the correct cover you’ll find it very expensive as regulatory authorities will impose clean-up costs and fines; then there are the third-party damage, nuisance claims and legal expenses involved.
• Stock cover – Check your coverage levels and include cover levels for the days you carry extra stock as you’ll know when your busy periods are.
• Contents cover – This covers everything inside your business that is not anchored to the building and not stock, this includes your tills, forklifts, fridges, freezers and computers.
• Business Interruption – You can cover the loss of your business’ revenue or profits if they suffer a downturn from an insured unexpected event such as a fire, blocked access to your forecourt or even equipment failures that disrupt the normal operation of the forecourt. Make sure you understand this cover as it’s vital to ensure business continuity and financial stability.
• Auxiliary income sources such as car washes, coffee machines, food-to-go concessions, parcel lockers, are often forgotten when reviewing insurance. These require covering as they each carry liability risks and will cost you to repair/replace.
Forecourts are complex businesses – and their insurance needs to reflect that. Mamtora’s number one tip for forecourt operators is to review your insurance regularly and make sure it’s keeping pace with your business.
