How Much Is Liability Insurance For Oil and Gas Contractors?
The oil and gas industry is a pillar of the Canadian economy which provides over 500,000 direct and indirect jobs and makes up nearly 6%-10% of Canada’s gross domestic product (GDP). The oil and gas industry is fueled by people, many of which are independent oil and gas contractors or work for small, medium, and large oil and gas contracting firms that provide all sorts of products and services to oil and gas companies. Regardless of whether you are actively and physically working on wells and/or pipelines, doing inspections, or providing advice, guidance, and/or recommendations on design, operations, etc. the experienced business insurance brokers at the commercial insurance brokerage ALIGNED Insurance can help!
What Factors Impact How Much Liability Insurance Costs For Oil and Gas Contractors?
How much is liability insurance for oil and gas contractors depends on a number of factors and is determined with the support and direction of actuaries at the Canadian insurance companies that offer insurance for oil and gas contractors. Some of the main factors that impact the cost of insurance for oil and gas contractors are as follows:
- Amount of work projected i.e. projected revenue for 12 months
- Type of work – professional advice vs. manual labour/physical work
- Experience & expertise of people doing the work
- Amount of insurance needed
- Insurance deductible levels
- Insurance claims history for similar products
- Type of insurance needed ex. commercial general liability, professional liability and/or contractors pollution liability, etc.
What Types Of Insurance Do Oil And Gas Contractors Need?
What types of insurance oil and gas contractors need is dependent on their operations and below is a brief explanation of what each type of liability insurance product for oil and gas contractors covers.
Commercial General Liability Insurance For Oil And Gas Contractors – commonly called CGL, GL or General liability insurance this product is the most commonly purchased type of insurance by oil and gas contractors and covers the bodily injury and/or property damage caused mainly from physical work performed.
Professional Liability Insurance For Oil And Gas Contractors – also known as E&O Insurance is a commonly purchased and required insurance product for oil and gas contractors and consultants. It covers the financial loss, physical damage, and/or bodily injury caused by non-physical work like design, inspections, etc.
Pollution Insurance For Oil And Gas Contractors – given the potential for contaminating soil and/or causing damage to property or people’s health oil and gas contractors buy pollution liability insurance that typically covers the cost to remediate soil and water from a spill and also typically covers liability for damage to property or injuries/sickness of third parties caused by a spill or leak.
What Insurance Do I Need as a Consultant?
Oil and gas consultants should have errors and omissions insurance, which is also called professional liability insurance. Consultants work with different companies to provide advice and other services that help their clients become more efficient and profitable. Clients can become dissatisfied with your consulting services, resulting in a lawsuit. Errors and omissions insurance can protect your business from claims of errors, omissions, negligence, and inaccurate advice resulting from your services. It’s a small price to pay to protect your business from costly lawsuits.
What is Oil and Gas Insurance?
Oil and gas insurance protects companies from the risks involved in working in the oil and gas industry. Some operational risks include onshoring and offshoring, pipelining, trucking, drilling, manufacturing, and more. There are many types of oil and gas insurance policies to protect your business against financial loss caused by an insured peril or a third-party claim. Oil and gas insurance protects your business from any claims or lawsuits arising from your oil operations. It helps mitigate the potential financial losses you could suffer since property damage and lawsuits could be very costly.
Do Oil Companies Have Insurance?
Oil companies should have insurance protection to protect themselves against operational risks. General liability insurance is essential for oil companies to protect them against lawsuits arising from third-party claims stating property damage or bodily injury. Due to the risky nature of the oil industry and the increased chance of lawsuits for any mistakes or damages, general liability is one of the most important considerations when it comes to insurance. Depending on the types of services you provide, you might also need product liability insurance, commercial property insurance, pollution liability insurance, auto insurance, and other insurance products.
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