Necessary Oil & Gas Insurance Coverages for the Industry
Safety and environmental concerns are common in the oil and gas industry. These concerns are often addressed by having different insurance policies. This coverage is a series of tailored policies to protect energy companies in producing and distributing oil and natural gas. Companies belonging to this industry can acquire such policies through specialty insurance coverage providers like Daniels, who specialize in Santa Fe Oil and Gas Insurance.
The energy industry where oil and gas companies belong is not limited to oil, gas, or energy generation. Professional services like geological surveys, inspections, transportation, and well design also belong to this industry. It is an expansive and diverse business that requires a thorough assessment of the company’s structure, operations, and risks.
What’s in an Oil And Gas Insurance Policy?
Oil and gas insurance coverage refers to a series of insurance policies covering human life, the environment, and property from any risks involving the oil and gas organization activities. Since the industry consists of procedures, chemical reactions, and harsh and brutal working conditions, these increase the risks involved in cost-intensive property, human life, and the environment.
Oil and Gas Insurance Policy Types
These different types of insurance coverages help address various exposures that oil and gas companies face. Here are several types of insurance coverages oil and gas companies need:
Commercial General Liability Insurance
This type of insurance will defend claims of bodily injury or property damage. It also aims to protect businesses against incidents or accidents that may occur within the workplace. For oil and gas businesses, general liability often includes environmental protection and clean up coverages should things go wrong.
Business Property Insurance
Every company owns a property used to conduct its daily business operations and deliver its goods and services. This coverage protects the company’s equipment, supplies, and tools in the event of a claim.
Professional Liability Insurance
This insurance offers protection for the mistakes and errors made by you or someone at your company. It helps protect professional advice-providing individuals, service-providing personnel, and companies from bearing the full cost of a negligence claim filed by a client. This insurance is critical for oil and gas companies that offer professional services to other businesses in the supply chain.
Workers’ Compensation Insurance
With hazardous day-to-day operations, oil and gas companies face risks of explosions, fires, land collapse, and complicated machinery. For this reason, workers’ compensation insurance for oil and gas companies are more expensive compared to other industries.
It is designed to shoulder medical bills, rehabilitation services, disability payments, and lost wages for workers who are injured on the job. However, it is still imperative that the company maintains an employee operations protocol with safety standards to prevent accidents and injuries.
Commercial Umbrella
For the oil and gas companies, very stringent underwriting guidelines are needed for a commercial umbrella policy. This usually includes detailed claims history, agreements of all leased equipment, and management experience in the industry. This adds extended liability coverage to other liability policies, including general liability, workers’ compensation, and commercial auto insurance.
The umbrella policy kicks in once the liability limits of the underlying policies already meet the policy cap. It is a cost-effective solution for a company to get more liability coverage without increasing every policy limit.
Equipment Breakdown Insurance
For oil and gas companies, the cost of broken machinery can be financially devastating without equipment breakdown coverage. This provides coverage from the costs and possible loss of income resulting from sudden malfunction or damage to vital business equipment. For oil and gas businesses, it includes coverage for the well pump or transmission. It can also be purchased as an add-on to other policies or a standalone policy. Specialized underwriters are required to visit site locations to assess the risk properly since oil and gas equipment is highly complex.
The industry of oil and gas is a dynamic marketplace, full of economic highs and lows and more than its share of physical and environmental risks and dangers. Faced with these risks, it is clear that companies in the oil and gas industry need specialized insurance solutions. No matter the type of operation, mitigating these risks is a critical part of the overall oil and gas industry. Consequently, insurance policies play an essential role in a company’s general interest.
About Daniels Insurance, Inc.
At Daniels Insurance, Inc., we have a unique understanding of the risks that businesses like yours face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.