The oil and gas industry is a dynamic marketplace, full of economic highs and lows and more than its share of physical dangers. As with any specialized industry, there are unique risks in the oil and gas business, and risk management is at the core of protecting business assets. U.S. Risk Underwriters, a prominent special-risks insurance company, works with insurance agents and brokers across the country to provide comprehensive insurance solutions for oil and gas industry clients. The firm has extensive experience in navigating the challenges of the industry, and offers insurance programs that meet the needs of industry clients perfectly.
Risks in the Oil & Gas Industry
As of 2015, the United States has become the leading producer of oil and gas in the world. Even as prices plummeted and drilling rigs were discontinued in favor of advanced technologies like hydraulic fracturing, production increased dramatically. Drilling rig count, or the number of active drilled wells, was a common risk metric for insurers. Now that other technologies have taken traditional drilling’s place, this can no longer be relied upon as an accurate measure of production capability.
Along with new technologies come new risks, particularly in the case of hydraulic fracturing, or “fracking”. Wells drilled in one insurance policy period may continue to produce years after the initial well placement, creating significant issues for insurance brokers and their clients. Physical risks, such as workplace accidents, environmental contamination, and blowouts compound the inherent dangers in this industry. In 2017, accident rates experienced a downturn, thanks to improved safety standards and automation of critical oil/gas production tasks. However, when an accident does occur, the insurance claims tend to be substantially higher than in years past. This is partially due to the complicated and expensive technologies employed to maximize production levels, and higher claim levels can also be attributed to emerging energy markets. A single oilfield accident, such as a catastrophic blowout or explosion, can cost millions of dollars in cleanup expenses, lost business, and worker injury claims. Negligence or professional liability claims may also cost thousands or even millions of dollars in unforeseen expenses for production companies.
Faced with these risks presented above, it is clear that companies in the oil and gas production industry need insurance solutions. No matter the operation, mitigating risks is part of the overall oil and gas industry picture, and insurance plays an important role in risk management. Clients of insurance agents may be oilfield operators and well-servicing contractors, consultants, equipment sales and rental operations, and manufacturers, to name only a few of the many players in this dynamic energy production industry. Each of those players must balance potential risks against the insurance products available to protect their financial interests.
Specialized Insurance Solutions for the Oil & Gas Industry
U.S. Risk Underwriters has many years of experience in serving oil and gas production clients of partner insurance agents. The firm has developed its own Energy & Environmental division to better address the insurance risks production companies face. Insurance solutions provided by the company are known for their comprehensive coverage and flexibility, ensuring that the specific needs and risks of each client are covered. A range of coverage lines are available, including general (GL) and professional liability (PL), inland marine, contractors pollution liability (CPL), and environmental impact/impairment liability (EIL) or Site Pollution. This last component is critical, as typical liability policies specifically exclude pollution as a covered risk, a problem that has plagued the industry for many years. Each of these solutions is tailored to clients in both upstream and downstream operations. With the right insurance products in place, the expenses of oilfield worker injuries or a catastrophic equipment failure can be managed successfully, protecting the valuable business assets of the insured.
About U.S. Risk
U.S. Risk Insurance Group, Inc. is a wholesale broker and specialty lines underwriting manager providing a wide range of specialty insurance products and services. Headquartered in Dallas, Texas and operating 16 domestic and international branches, U.S. Risk and its affiliates would like to help you access a world of new markets and products. For more information, contact us today at (800) 232-5830.