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Whether you’re drilling for natural gas or crude oil, there are many risks that oil and gas companies need to be aware of when choosing their insurance.


With that in mind, the top three considerations that every oil and gas firm should focus on when it comes to their insurance needs are coverage, carrier choice, and working with a broker that specializes in the oil and gas industry.


Choosing the Appropriate Coverage


Any smart business owner understands that insurance is all about risk management. When finding the right insurance coverage for your business, you need to go beyond making sure you are compliant with any master service agreements and ISNetworld verifications, and make sure you are actually covering all of your risks.


In the oil and gas industry, these are some of policies you will want to consider:

 

  • Workers’ Compensation

  • General Liability

  • Automobile Liability & Physical Damage

  • Excess Liability

  • Property

  • Inland Marine

  • Crime

  • Control of Well


* Click Here for more information on risks and exposures in the oil and gas industry.


If you don’t have policies in place that are sufficient enough to cover you in the case of an accident, then a minor claim can set you back thousands or even millions of dollars, and potentially even put you out of business.

 

In a perfect world, your business will never have to place a claim with the insurance company, but if that time ever comes, you want to make sure that you are covered.


Finding the Right Carriers


Finding the appropriate carrier for your insurance needs can be a difficult process. There are many carriers that you can work with, but not all of them are going to be the right fit.


The first question you will want to ask is what is the rating of the carrier?

When it comes to insurance ratings, A.M. Best is your go-to resource. Their rating service takes a look at the financial strength and creditworthiness of the carrier, which helps you determine whether the company has the financial resources to pay your claims in case of an incident.


In addition to their rating, it’s important to evaluate the carrier’s expertise when it comes to providing loss control and claims handling services. You want to make sure that the carrier you choose has a good reputation when it comes to speed of service.


If a piece of equipment that your business depends on breaks, you need to know that you have a reliable and speedy carrier on your side to help you quickly process the claim and get your equipment back up and running in the shortest period possible.


Working with an Experienced Agent


Finally, the last consideration when choosing your oil and gas insurance coverage is determining whether or not your agent has experience in the industry.


Not all agents (or agencies) are created equal, so I would find out what they specialize in and if you would be a good fit to work together. You can do this by asking some simple questions:

  • Do they have experience in the oil and gas industry?

  • What carriers do they like to work with when it comes to your industry?

  • Are they familiar with ISNetworld?

  • Do they offer safety services?

  • Have they taken the time to get to know you and understand your business model?

 

It’s also important for your carrier to understand the different exposures that your business faces depending on your role in the industry. An experienced agent should know the difference between the following business types and the unique exposures that each of these face:


  • Drilling Contractors

  • Midstream Companies

  • Oil and Gas Manufacturers

  • Oil and Gas Suppliers

  • Operators / Non-operators

  • Service Contractors


At the end of the day, choosing the appropriate coverage for your business can be a tough decision and this is why you should work with an insurance agent that truly knows and understands your business.


Not only will a good agent help you make sure you have all the right coverages, but they will also make sure you’re not paying for something you shouldn’t be.


If you or someone you know is considering coverage for your oil and gas business, fill out the form below to talk one of our agents who specialize in this industry.

 

 

Article by Jeff Mostek

With over 10 years of experience helping people solve complex insurance issues, Jeff is a dedicated professional with knowledge spanning numerous industries. While he is capable of helping all types of businesses with their insurance needs, he specializes in working with companies in the oil and gas, manufacturing, and construction industries.

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Posted 2:44 PM

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