Propane Fill Exposure

Dear valued customer,

This newsletter is for our insureds who offer, or are considering to offer filling of propane bottles.

This exposure is becoming increasingly more difficult to insure because of its potentially large claim exposure. Some insurance companies are starting to restrict this coverage and others have stopped quoting locations that have propane filling altogether.

One of the big insurance companies we represent just had a very large propane loss.

Details of the claim are as follows:

•    The service station employee filled 3 propane bottles that were expired and that had not been “requalified”
•    One tank exploded at the customer’s house.
•    2 individuals were severely burned and one of them had since passed away - a very unfortunate situation.
•    The service station is now being sued for over $8,000,000 and unfortunately, they appear to only have a $1,000,000 liability policy.

Also, our agency too, has recently had a different large propane claim similar to the one discussed above. In that claim, again the insured filled a bottle that was over 10 years old and, although that bottle was requalified, the insurance company still paid $400,000.

Something to think about…Unless propane filling generates a substantial source of income, you may want to reconsider offering that service.

However, if you continue to do propane fill,…  It is important to make sure that the employees that is filling these bottles are properly trained on what bottles they fill and that you are up to date on all regulations. DO NOT let untrained employees fill propane bottles.

The propane supplier you are working with should be able to provide such training on a regular basis.