Petroleum Marketer Certificate Management

Your wholesale (or broker) division is doing a great job generating new business, selling more fuel to current customers and finding new customers who want to do business with your company.  In fact, you are selling so much fuel that you cannot haul it all and must contract with common carriers to haul it to your customers.

When arranging the common carrier to haul the fuel, it’s likely the timeliness of the delivery and the rate to move the product are two of the most important considerations in choosing the company to load and drop the product.  It’s likely that whoever you have move the product is a company that you know has experience, or at least a working knowledge of, and you’re comfortable hiring them to do the work.

The common carrier is the one picking up the product at the terminal, driving it down the road, and responsible for safely dropping the product in the correct tank at the customers’ location.  So, what could go wrong?

Two Scenarios:

1. The common carrier runs into a bridge pier, and the heat from the resulting fire causes the bridge to collapse. The damage to the bridge will cost $7,000,000 to repair and the common carrier has $5,000,000 in coverage.  You own the fuel on the tanker, so what liability do you have in this situation?  And if you are found to have liability, will you have coverage when you need it?
   5. https://www.fhwa.dot.gov/publications/publicroads/02sep/05.cfm
   6. https://www.eastbaytimes.com/2007/04/29/speeding-tanker-crash-leads-to-fire-freeway-collapse/
2. The common carrier driver rolls the truck off the highway spilling the contents onto the ground. The common carrier has $5,000,000 of pollution liability coverage, which is more than enough to clean up the mess.  However, when you received the certificate of insurance there was no mention of cargo coverage (or coverage for property of others in transit).  You come to find out that the common carrier does not have cargo coverage and does not have the funds to repay you the $30,000 for the load you had on the trailer.  How are you going to go about collecting that payment?

How are you managing your certificates from any common carriers hauling fuel you’re selling down the road?  And, are you fully aware of your exposures and the impact an uncovered, or under covered, claim may have on your business?

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