We have talked on many occasions about environmental insurance for gasoline and diesel stations, this time we want to dedicate this article to LP Gas outlets, since they have their own regulations, rules and insurance guidelines.
As always, we will put a contact form at the end of the article so that you can send us your doubts, comments or requests for a quote.
To begin, we will talk about the provisions that we find in the DOF (Official Journal of the Federation):
In Section IV (Sale to the Public) we find in Article 34:
“Those who carry out activities of Sale to the Public of compressed natural gas or liquefied petroleum gas for carburization stations, must contract an insurance policy that covers the CR and RA, for a combined Limit of Liability of $ 500,000.00 USD (Five hundred thousand dollars of the United States of America) per event.”
Why is the CR (Civil Liability) and RA (Environmental Liability) policy necessary?
Due to the magnitude of the damage that an accident could cause inside the liquefied gas and natural gas dispensing stations, the authorities decided that they should have financial protection that would allow them to face these expenses and thus guarantee compensation for possible material damage, environmental damage and damage to people (injuries and deaths).
What should the insurance policy cover?
In these same provisions we find: Chapter III OF INSURANCE, Article 17:
“Without prejudice to the provisions of the previous article, insurance policies must include:
In the case of liability for environmental damage, among others, costs and expenses of:
- Emergency care;
- Containment of contaminants;
- Mitigation of environmental impacts and damage;
- Environmental restoration or compensation;
- Characterization of contaminated sites, and
- Remediation of contaminated sites.
In the case of civil liability, you must contract a basic or general coverage that covers the liability against third parties of the Regulated, in the terms of the Provisions relating to Insurance against liability of the Law on the Insurance Contract. “
How can I take out insurance?
These types of environmental insurance policies are usually a bit difficult to obtain, but the insurance market has become increasingly open to the analysis of these regulations and the needs of the sector to comply with these requirements. What we do at Seguros HCid is ask the regulated for the following information:
- Fill out an environmental questionnaire that we provide.
- Photographs if you already have the facilities built.
- Plans in case the project is in design.
- Any environmental impact study that is available.
- If you have a Maximum Probable Loss study , it can help determine a sum insured different from that stipulated in article 34.
- If you have an Emergency Response Protocol, it helps a lot to attach it to the file.
- And any other document that helps the risk assessment.
What is the average cost of these insurances?
The cost varies depending on the projects, there are small projects, isolated or with extensive security measures to mitigate the risks, which allows access to discounts or lower rates, but we usually find costs between $ 4,000 and $ 6,000 dollars a year on average. Of course, we have found cases of LP gas dispensing stations that have different locations (several stations) and that the protections can cost more.
Some exclusions of these insurances are:
- Claims under foreign jurisdiction
- Overseas Locations
- D&O
- Loss of documents
- Fines and penalties
- Acts prior to the effective date
- Lack of data confidentiality
- Cyber damage
- Gradual and/or gradual contamination
This is some information that may be useful to you if you are starting or are already operating an LP Gas vending station. Remember that to apply for environmental permits before the ASEA it is very likely that they will ask you for an insurance quote that complies with these guidelines and in case of starting to operate you will have to hire this mandatory guarantee, in case of not having it and operating you can be creditor to fines and surcharges.
If you want us to support you with quotes please contact us through the following form.