Your wholesale (or broker) division is doing a great job generating new business, selling more fuel to current customer and finding new customers who want to do business with your company. In fact, your 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 you have 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?
The common carrier runs into a bridge pier, 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, what liability do you have in this situation? And if you are found to have liability, will you have coverage when you need it?
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). Come to find out the common carrier didn't have Cargo coverage and doesn't 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?
FACT: Your business reputation, money, and data are all at risk of being damaged or stolen every single day!
Let's further explore the potential of money being stolen or transferred out of your account without your knowledge and/or authorization. You've read the articles about computer fraud, funds transfer fraud, alteration or forgery of checks, and so on. All these scenarios leave businesses in a tough spot of having funds gone, sometimes hundreds of thousands of dollars, and not enough cash for immediate expenditures.
How can you protect yourself and your business from this type of situation?
This service mandates you must personally authorize the list of entities which are able to ACH out of your account.
Any vendors you have which automatically draft what you owe them would have to be ok'd by you and signed for in person (just once, not monthly).
This keeps a fraudster from hacking into your account, setting up an ACH to their bank account, and drafting out money without your authorization.
You should consider asking your banker about the availability of these services, especially if you don't currently purchase Computer Fraud / Funds Transfer Fraud coverage on your crime or cyber liability policies.
Why is this not covered by your Crime Coverage?
Crime coverage is designed to protect your business from theft of money, securities, property, etc. by either employees or third-party thieves. These claims involve property that was unknowingly stolen from you without authorization.
Social Engineering claims are not covered because you, or your employee, and therefore your company, have parted with the funds voluntarily by sending the payment or funds as instructed by the Fraudster!
If you're willing to commit a few minutes of your time we would be more than happy to discuss this risk in greater detail, review some claims examples, and help you determine your exposure for this type of loss.
I was recently asked this question by one of our Roark and Sutton clients, and thought I would share the answer here for our readers.
Why do my auto insurance rates keep going up even though my car is getting older? At Roark and Sutton , many of our clients ask this question so I would like to address it from a couple of angles.