Propane safety in tough times

December 1, 2008 By and    

Times have been tough for propane marketers.

Jay Johnston
Jay Johnston

Marketers caught with high-cost contracts as the price of product dropped through the floor are really singing the blues. Such tough times have everyone looking for ways to cut expenses. It appears that safety tops the list.

It does not help when other industries such as financial institutions and auto manufacturers are seeking bailouts because of poor management decisions. The issues become even more painful when well-managed companies get caught up in the collateral damages from those who failed to be diligent. We all will partake in paying for these costly bailouts.

The going gets tough

Tough times impact safety results in many ways.

When consumers are strapped for cash, they tend to avoid paying for goods and services, including the tangible product (propane) and the intangible product (safe service). Cheap gas, no service and do-it-yourself workmanship become an attractive nuisance when times are hard. Such activities cause accidents.

After an accident, those ill-fated folks will hire plaintiff’s attorneys, deny such activities, not recall past warnings and refuse to admit their hands were involved with poorly executed handiwork. They will look for a financial bailout of their personal circumstance by tapping into your insurance limits.

When propane marketers are strapped for cash because of receivables, fluctuating gas prices or credit issues, they tend to avoid costly training, fail to inspect what they expect of employees or customers and tend to increase risk factors to liability exposures. Some marketers even turn to poorly regulated insurance providers.

I predict, within the next year, the insurance industry will be forced to raise rates because of collapsing investment income. Most insurance companies use premium investment income to offset losses and expenses. The less regulated the insurance company, the more likely it will fall prey to results of tough economic times.

In addition, insurance companies have been the whipping boy for safety over the past decade, and those results have been impressive.

Those loss-control representatives deserve a great deal of credit for encouraging propane marketers to act in ways that prevent accidents. Gas system check numbers, Certified Employee Training Program qualification numbers, National Fire Protection Association compliance numbers, Department of Transportation compliance numbers and duty to warn consumer communications all have increased because of their efforts. Hopefully they will continue to invest in loss control in tough times.

Survive tough times

Will current tough times impact these positive gains and impressive results? Each marketer knows how much safety-related expenses have been cut this year. Employees know and some, out of ignorance, are relieved.

Regulation has its role – especially in tough times. Our current troubles on Wall Street are credited to a lack of regulation. Most insurance-company failures are due to a lack of financial regulation. Preventable accidents are usually related to a lack of internal and external safety regulation.

Tough times are no time to enable ignorant cash-strapped consumers or to pad the pockets of plaintiff’s attorneys. Tough times are no time to avoid training, equipment and services that can prevent accidents and protect the golden goose. Tough times are no time to be insured with a poorly regulated insurance company.

One of my favorite books by Robert H. Schuller is titled “Tough Times Never Last, but Tough People Do!” The key to surviving tough times is to be aware of exposures before they turn into problems and never quit doing the things that made you successful in the first place.

At your next safety meeting, discuss the problems, design solutions and stay tough on safety – even in tough times.

Jay Johnston

) is a proactive insurance agent, business consultant, safety writer and inspirational speaker. Jay can be reached at
or 952-935-5350.

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