Case Study:
Group Insurance
Programs for an Integrated Oil Company
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Problem:
A refinery owner was
in the process of becoming a major integrated oil company by acquiring a nationwide
retail gasoline distribution network.
The company's insurance program at the time reflected the high-severity, low-frequency nature of their refinery operation but did not provide adequate coverage for the large number of smaller losses that accompanied the new retail exposures. Several hundred retail gas stations and convenience stores outlets were managed by dealers, while several thousand more were owned and operated by independent jobbers.
Action:
Legally, the company now had a direct liability exposure from the dealer-operated stations, which left them open to litigation arising out of accidents at these locations. Jobbers represented different issues because they operated more autonomously than dealers, buying product from multiple refineries and using their own transportation.
We worked with our client to draft new insurance requirements for both the dealers and jobbers, and devised a solution for the over-worked risk management department to ensure that their new insurance requirements were being met.
Results:
We arranged a group property and liability program for all the dealers. This reduced their workload and their insurance costs. More importantly, it ensured proper coverage for our client and automatically relieved them of the need to monitor compliance with their contract.
Then, for all jobbers, we created and offered a group purchase option in full compliance with the insurance requirements, and guaranteed insurance to all. We co-ordinated the solicitation with the company's marketing group.
Finally to reduce the risk manager's administrative burden, we created customized software to monitor the certificates sent in by the independents, addressing any deficiencies in their coverage.
