There is no cover-all insurance for oil and gas professionals. Ensuring the services you provide and equipment you use are specifically covered can be the difference between a successful future or a business failure.
Why Do You Need Specific Insurance for the Oil and Gas Industry?
The oil and gas industry is a diverse field with many subsets within the industry. Because there are so many specific sectors, insurance for oil and gas professionals and businesses can get very complicated. Beyond the general policies that almost all businesses use to protect themselves, the types of insurance chosen for an oil and gas company need to be tailored to the specific equipment that they use and services that they provide.
Safety and risk management in the oil and gas industry should be a top priority. Without the proper risk management, training and education, and oil field liability insurance, your organization could be exposed to potential business-crushing losses. The types of insurance you choose need to protect you and your employees from damages, injuries, fines, and expenses associated with your services.
Types of Insurance for the Oil and Gas Industry
The majority of businesses in the oil and gas industry protect themselves with the following types of insurance options:
- Worker’s compensation insurance
- General liability
- Commercial auto insurance
- Property insurance
- Umbrella and excess coverage
- Professional liability
- Employment practices liability
- Cyber Liability
While the policies above are essential for most businesses, they may not offer enough coverage to properly cover your assets if you are an oil and gas business. You will need to find coverage that focuses on your expertise and the services you provide. Consider some of the following options for your oil and gas business insurance needs.
Control of Well Insurance
Control of well insurance is one of the most complicated insurance coverage options, and it requires a thorough understanding of the oil and gas industry. Insurers offer plans to help protect your business from catastrophic events that may occur during the drilling process. The costs of regaining control of a well, cleaning up after large-scale pollution, and restoring the viability of a well after a disaster can be overwhelming. If a policy doesn’t properly insure a business in times like these, it can be impossible to recover financially. When implemented correctly, a control of well policy can cover the vast majority, if not all, of these expenses.
Oil and Gas Lease Property Insurance
Equipment in the oil and gas industry can be costly. Having to shoulder the financial burden of replacing machinery and equipment could hinder a business’s growth. Oil and gas lease property insurance protects companies by covering some of the replacement costs if your oilfield property is damaged by a covered loss. Typically, these plans cover production equipment, tanks, pumpjacks, pipelines, and gathering systems. Even crude oil stored in petroleum tanks after being extracted may be covered. Property and equipment can always be replaced, but you cannot recreate the oil, making it a critical asset to protect.
Rig and Hull Insurance
If you are in the oil and gas drilling and operating business, rig and hull insurance is necessary. Unfortunately, no matter how many precautions a company takes, rig accidents are commonplace. Protecting yourself from the repercussions of these accidents keeps your finances aligned with future growth, rather than directing your funds towards replacements. Rig insurance may protect your machinery from damage occurring during the installation phase, mechanical breakdowns, severe weather occurrences that damage or destroy your equipment, and even theft. Rig insurance is often broken down and categorized into specific coverages, such as:
- Onshore or offshore property damage
- Construction damage
- Physical damage to rigs
- Pipeline damages
Be sure to get coverage specific to the needs of your organization to avoid unnecessary financial hardships, or overpaying for coverage that you may not need.
If your business ships crude or other resources via water, then you should consider a hull policy. These policies are designed to cover the hull itself as well as its functioning parts. Hull insurance shields businesses from the costs of replacing destroyed hulls and repairing machinery damage.
Riggers Insurance
Contractors responsible for lifting and transporting heavy machinery and large equipment belonging to other organizations need to cover themselves with a riggers insurance policy. When moving enormous equipment in variable weather conditions, it is not uncommon for damage to occur. This insurance option can cover instances of damage that happen during the transportation and rigging process.
Other Types of Oil and Gas Insurance to Consider
As previously stated, the oil and gas industry can have incredibly nuanced insurance options. Depending on the services you provide, you may need even more specialized oilfield liability insurance coverage.
Inland Marine Insurance
Inland marine insurance can provide coverage for the products, materials, and equipment used in the field, in transport, or in possession of third-party warehousers or other third parties. Simply stated – if you have valuable equipment that moves from place to place, you should consider an Inland Marine Policy.
Pollution Liability
Regretfully, the oil and gas industry has been responsible for some of the most devastating pollution in world history. If your company is responsible for cleanup after a catastrophic event, it can cost you billions of dollars, and that doesn’t include the likely fines. Pollution liability coverage or an Environmental Policy are the only ways to help save yourself the costs of cleanup and, potentially, punitive damages that may be assessed.
Insource Insurance Group Provides Insurance for Oil and Gas Professionals and Businesses
The types of insurance options available for your business are varied, and specific to different facets of the oil and gas industry. It can be challenging to ensure that you are choosing the right coverage. Insource Insurance Group’s agents specialize in oilfield liability insurance and protecting your company’s assets. We also have safety and risk management resources to help companies in the oil and gas industry. Contact us today to find out how to protect your business!
