OIL AND GAS INDUSTRY COVERAGE OPTIONS
Protect Your Workers, Workplace, and the Environment
Nearly half a million workers are currently employed in the US oil and gas extraction industry, and that number is on the rise as the world’s demand for energy continues to grow. This increase means more risks for well operators as they struggle to keep up with demand. Fortunately, there are many types of coverages available to help mitigate these risks.
There are three major risk types that the industry faces:
- Environmental. Major oil spills, gas emissions, and other contaminations occur – and pose a serious threat to – the natural environment.
- Equipment and Property. Equipment risks include malfunctions and downtime, which cut into profitability. Institute preventive and predictive maintenance to combat these risks.
- Worker Health and Safety. This industry is dangerous. The fatality rate is seven times the national average for all American workers. Providing the proper training and safety measures for workers is vital.
What are Your Coverage Options?
- Pollution insurance is a necessity because CGL policies typically exclude pollution events. There are several different types of pollution insurance:
- Pollution legal liability (PLL) and environmental impairment liability (EIL) are site-specific coverages written on a claims-made basis. Incidents that are gradual in nature and take a long time to discover, such as a small pipeline leak, may trigger a claim. If an operator knows the exact point at which the incident occurred, it is usually not covered under a PLL/EIL policy.
- Contractors pollution liability (CPL) insurance covers oil and gas contractors against claims from third-party bodily injury, property damage, cleanup costs and/or environmental damage due to their work on a worksite.
- Storage tank liability (STL) covers damage from leaking storage tanks, whether they are above- or below-ground.
Equipment and Property Coverage Options
- Control of well or operators extra expense (OEE) cover expenses incurred in regaining control of a well after cratering or blowout and potentially include coverage for pollution, equipment malfunction, evacuation costs, and property damage.
- Oil lease property (OLP) coverage covers a loss or damage to petroleum storage tanks at scheduled locations.
- Riggers legal liability insures all contractors when handling a worksite’s equipment.
- Rig and equipment physical damage coverages protect much of the equipment used on a worksite from theft, breakdown and weather events. These coverages are often written with business interruption coverage, which replaces income lost due to a loss of production. There are many types of physical damage coverages, including:
- Onshore production property damage
- Offshore platform and pipeline damage
- Onshore and offshore construction
- Drilling rig physical damage
- Marine cargo insurance and hull physical damage
Worker Health and Safety Coverage Options
- Worker’s compensation and return to work programs keep workers safe and healthy. These are vital coverages for the often hazardous oil and gas industry.
- When employing contractors to work at your site, it is important to make sure both parties are fully insured. Carefully scrutinize all contracts and joint operating agreements. If a joint operating agreement requires each party to carry $1 million coverage, agree to split the amount if the claim is in excess of $1 million.
Additional Coverage Options
- Umbrella liability will cover excess costs over the policy limit associated with a claim.
- Professional liability is important for the development of a drilling site, including exploration, well design, testing and decommissioning. This coverage will pay for bodily injury and property damage, along with pollution incidents arising from these professional services.
- Inland marine coverage covers onshore activities associated with running an operation, including transportation of equipment and other moveable parts. Similarly, ocean marine coverage will pay for damage and losses due to transportation of equipment via sea vessel.
Contact INSURICA today to learn more about your oil and gas coverage options.