Liability insurance for fill stations

[Brilig]

Greetings dive professionals. Several years hence I will be retiring from my regular work and would like to start a business serving the diving community. Setting up a fill station for everything from air through mixed gas for tech along with tank inspections requires careful precision that appeals to me. I can imagine that a business involving the filling of high pressure gas cylinders combined with selling a product used for human consumption is going to require the need for some serious liability insurance. I'm thinking about getting certified to do tank inspections so I can get a Saturday job working at my LDS as a way to get exposure to the business side of scuba.
Keep in mind I'm talking retirement business so I'm not looking to get rich. Just supplement my retirement and keep myself occupied.

 

[Wookie]

Is there a question here? I have seen a few fill stations dedicated to providing excellent service and wonderful gas. Sadly they are not typically sustainable, as the LDS will undercut you to get folks into their shop. Fill Express is an excellent example.

 

[wetb4igetinthewater]

There are some places around the world that provide nothing but gas. I'd look at what they are doing. There's Amigo Dive Center in Florida. I met Wayne at DEMA one year. Very helpful in answering questions. I'll ping a friend who is aware of other places and comment.

 

[wetb4igetinthewater]

@Brilig

So I'm chatting with my friend via FB messenger who introduced me to Wayne. Couple of things he said: that's a hard business to get into as the ROI is typically zero. Wayne works incredibly hard, so you want to really think about what other revenue streams you'd have. If you want to craft together a business plan, I'd send it onto my friend who has opened his own DC in Central America, but he makes more money of welding and providing other services (he's incredibly mechanically inclined) so doesn't run his DC all the time, more when he wants to. He's a very good resource and I'd be happy to connect you with him.

 

[Brilig]

I think this idea comes from getting my tanks filled being the biggest hassle of the sport for me because of the shop location and the hours they keep. 90% of my visits to the dive shop are just for tank fills and inspections and I make a point of buying all my gear there and not on-line. I believe in supporting my shop as much as I can. I've been going to the same shop since 1985.
Also I forgot to actually ask a question in my original post (oops) but peoples experience with the liability insurance required is what I was after. Although any information on the subject is welcome so thank you for the responses.

 

[Wookie]

Any of the scuba shop liability providers ( Vincencia and Buckley, Witherspoon, Owl) will be more than happy to provide you a quote based on your plan. I would assume it will be treated as a normal dive shop as you will do all of the things dive shops do aside from instruction and gear sales.

 

[rhwestfall]

We have frequently discussed that air is a lost leader. It brings the divers in the store. If the actual operating cost was absorbed only by pumping gas, fills would be prohibitively expensive...

Good luck. Hope you can make your dream happen.

 

[macado]

I see your location is Boston so I am speculating that is where you might want to do this. I don't mean to sound negative but I just dont think it will work here.

I believe Wookie's answer regarding insurance would be correct. Vincencia and Buckley would happily write you a policy for a "dive shop." I'd also recommend you seek out training from PSI-PCI for visual cylinder inspection and O2 cleaning. This is only the beginning of the rabbit hole. You'll want some training on scuba valve / manifold rebuilds (mostly straight forward), some experience working with compressors, working/operating a fill panel, etc.

I would also recommend picking up a copies of Vance Harlow's Oxygen Hackers' Companion and Scuba Regulator Repair and Maintenance books. These resources will be super helpful for anyone operating a fill station or rebuilding valves, working with oxygen and doing cylinder inspections.

Personally while I do think there is an need for more quality fill stations I don't think the Return on Investment (ROI) is there. While Boston does have a small active community of divers it does not see the same amount of traffic that places like Florida sees. This would be even more limited when most charter boats are not running in the winter. Your prime window for most divers is May to October. Outside of these months the number of active divers drops off dramatically.

I had have often thought with the closing of Cape Ann Divers that a small fill station in Cape Ann (Gloucester/Rockport) would make a of sense but I don't see how it can be a money maker or even a profitable side business endeavor unless there is another revenue stream to make it worthwhile.

The two main examples of this business model that I know of are Amigo's in Cave Country and Fill Express (now closed) in Pompano Beach. Both of these locations in Florida have the benefit of a large amount of active divers with year round diving, including a large influx of tourist / visiting divers.

Besides the initial investment costs (compressor, multiple storage banks / cascades, fill panel, whips, nitrox stick, helium and oxygen bottle leases, booster, compressor maintenance (oil filter / changes, random repairs), you then have to pay for a retail space (if you're not running out of your garage/house), electricity costs, heating/cooling.

In addition you might have to pay and train an employee to operation said fill station unless you enjoy filling tanks for 8 hours a day in your retirement AND not going diving. Working in a dive shop can really put a damper on your diving schedule. It sounds like a good idea until you're stuck with a backlog of work on Saturday morning when you could be going diving. Then you have the liability issue (e.g. what if you sell someone bad oily gas laced with CO, bad fill, etc).

What you will notice is that lot of active divers in the Boston area (myself included) have all eventually gotten their own compressors, boosters and leases for oxygen and helium bottles after not wanting to deal with the incredible time waste of going to dive shops.

I will just say this..While I think running a commercial fill station might suck, having your own personal compressor is glorious. I'll NEVER make any money back here but the time saving benefits far outweigh the cost to me.

I'm just filling for myself, my wife, and a few very close friends that I trust but I can do this myself 24 hours a day / 7 days a week in my slippers without ever leaving my garage while drinking my coffee or beer. I don't have to worry about waiting in line, I don't have to worry about short fills, inaccurate nitrox or trimix blends. I don't have to worry about if the tanks I dropped off on Friday just sat in a corner because they were forgotten about. I don't have to sit in traffic an hour and half each way to get to the dive shop. I do my own filter changes and I have a secondary filter stack on my compressor that I keep track of. I'm currently in the process of adding an in-line CO monitor to my compressor.

TL;DR. In short I highly recommend getting your own personal compressor if the logistics and incredible time suck of going back and forth from a dive shop are getting to you. Learn everything you can about it. Perhaps you will really like it and it will be good hands-on training if you do ever open a commercial fill station.

You can get a somewhat decent but slow personal compressor for around $2500-$4000. (Alkin W31, Bauer Junior II, Coltri MCH6, just to name a few examples). If you're just filling for yourself or a couple people on occasion this will probably be fine. You can find used ones cheaper than this or of course decide you want a larger capacity compressor and spend more money.

If the thought of doing regular compressor maintenance, oil changes, filter changes and babysitting/monitoring tanks while they fill does not appeal to you then that is why dive shops exist

 

[Wookie]

(if you're not running out of your garage/house)

Your homeowners insurance will never allow this. In fact, if you have a home fill station, don't ask them about it.

 

[mmerriman]

I see your location is Boston so I am speculating that is where you might want to do this. I don't mean to sound negative but I just dont think it will work here.

I believe Wookie's answer regarding insurance would be correct. Vincencia and Buckley would happily write you a policy for a "dive shop." I'd also recommend you seek out training from PSI-PCI for visual cylinder inspection and O2 cleaning. This is only the beginning of the rabbit hole. You'll want some training on scuba valve / manifold rebuilds (mostly straight forward), some experience working with compressors, working/operating a fill panel, etc.

I would also recommend picking up a copies of Vance Harlow's Oxygen Hackers' Companion and Scuba Regulator Repair and Maintenance books. These resources will be super helpful for anyone operating a fill station or rebuilding valves, working with oxygen and doing cylinder inspections.

Personally while I do think there is an need for more quality fill stations I don't think the Return on Investment (ROI) is there. While Boston does have a small active community of divers it does not see the same amount of traffic that places like Florida sees. This would be even more limited when most charter boats are not running in the winter. Your prime window for most divers is May to October. Outside of these months the number of active divers drops off dramatically.

I had have often thought with the closing of Cape Ann Divers that a small fill station in Cape Ann (Gloucester/Rockport) would make a of sense but I don't see how it can be a money maker or even a profitable side business endeavor unless there is another revenue stream to make it worthwhile.

The two main examples of this business model that I know of are Amigo's in Cave Country and Fill Express (now closed) in Pompano Beach. Both of these locations in Florida have the benefit of a large amount of active divers with year round diving, including a large influx of tourist / visiting divers.

Besides the initial investment costs (compressor, multiple storage banks / cascades, fill panel, whips, nitrox stick, helium and oxygen bottle leases, booster, compressor maintenance (oil filter / changes, random repairs), you then have to pay for a retail space (if you're not running out of your garage/house), electricity costs, heating/cooling.

In addition you might have to pay and train an employee to operation said fill station unless you enjoy filling tanks for 8 hours a day in your retirement AND not going diving. Working in a dive shop can really put a damper on your diving schedule. It sounds like a good idea until you're stuck with a backlog of work on Saturday morning when you could be going diving. Then you have the liability issue (e.g. what if you sell someone bad oily gas laced with CO, bad fill, etc).

What you will notice is that lot of active divers in the Boston area (myself included) have all eventually gotten their own compressors, boosters and leases for oxygen and helium bottles after not wanting to deal with the incredible time waste of going to dive shops.

I will just say this..While I think running a commercial fill station might suck, having your own personal compressor is glorious. I'll NEVER make any money back here but the time saving benefits far outweigh the cost to me.

I'm just filling for myself, my wife, and a few very close friends that I trust but I can do this myself 24 hours a day / 7 days a week in my slippers without ever leaving my garage while drinking my coffee or beer. I don't have to worry about waiting in line, I don't have to worry about short fills, inaccurate nitrox or trimix blends. I don't have to worry about if the tanks I dropped off on Friday just sat in a corner because they were forgotten about. I don't have to sit in traffic an hour and half each way to get to the dive shop. I do my own filter changes and I have a secondary filter stack on my compressor that I keep track of. I'm currently in the process of adding an in-line CO monitor to my compressor.

TL;DR. In short I highly recommend getting your own personal compressor if the logistics and incredible time suck of going back and forth from a dive shop are getting to you. Learn everything you can about it. Perhaps you will really like it and it will be good hands-on training if you do ever open a commercial fill station.

You can get a somewhat decent but slow personal compressor for around $2500-$4000. (Alkin W31, Bauer Junior II, Coltri MCH6, just to name a few examples). If you're just filling for yourself or a couple people on occasion this will probably be fine. You can find used ones cheaper than this or of course decide you want a larger capacity compressor and spend more money.

If the thought of doing regular compressor maintenance, oil changes, filter changes and babysitting/monitoring tanks while they fill does not appeal to you then that is why dive shops exist

when I was in Cancun a couple of years ago, there was a mobile fill service that came out out to the marina and refilled tanks after our dives. I thought that was a cool idea.