Fuel Recovery Order Restarts, Raising Insurance Budget Questions

The revived order requires primary and secondary parties in covered chains to adjust or set rates at least once each calendar month so increased fuel costs can be recovered. Primary parties that are not small business employers must also take reasonable steps to ensure secondary parties in the same chain make the required adjustments. The Fair Work Commission has indicated that agreed fuel levies or surcharges may be used in some circumstances, and the obligations are due to cease if the average national terminal gate diesel price stays below $2 a litre for four consecutive weeks, unless the order is varied or revoked earlier.

That structure matters for owner-drivers and small fleet operators because fuel shocks can quickly crowd out other fixed business costs. Insurance premiums, excesses, finance repayments, tyre replacement, servicing and registration do not disappear when diesel spikes. If a business absorbs fuel increases for too long, it may be tempted to defer maintenance, reduce downtime buffers or accept unsuitable work patterns, each of which can create risk management problems later.

From an insurance perspective, the order should not be read as a guarantee that premiums will fall or that a claim position will change. It is a transport cost recovery mechanism, not an insurance reform. However, better fuel recovery may support more disciplined business management if it helps operators maintain scheduled servicing, keep safer routes viable and avoid taking uneconomic work simply to preserve revenue.

Truck businesses reviewing the change may wish to check:

• whether contracts clearly identify fuel adjustment mechanisms, timing and supporting evidence;
• how subcontractor records, trip data and fuel receipts are retained;
• whether changes in routes, freight mix or utilisation affect declared vehicle use;
• whether sums insured still reflect current vehicle, trailer and fitted equipment values;
• whether downtime, cargo and liability exposures remain aligned with the types of truck insurance cover actually held.

The practical limitation is that not every transport arrangement will be affected in the same way. Coverage depends on the structure of the contractual chain and the work being performed. Operators should separate compliance questions from insurance questions: one concerns rate recovery obligations, while the other concerns whether policies, records and risk controls accurately match the way the business is now operating.