Oil, Gas, & Energy Insurance

What oil and gas insurance covers, by segment

Oil and gas insurance is not one policy. It is a program assembled around where you sit in the value chain, because the exposures change completely from the wellhead to the pump.

Source: Alliance Risk program design across energy accounts. Coverage names follow ISO and London market conventions.

Every spoke of that table has its own page on this site, and each one goes deeper than this overview: oilfield contractor insurance for service companies working under operator MSAs, control of well and OEE insurance for anyone holding a working interest, drilling contractor insurance for rig owners, pollution liability insurance for the coverage every energy MSA requires, and foreign voluntary workers compensation for crews deployed outside the US.

What a standard general liability policy excludes for oil and gas work

The ISO commercial general liability form (CG 00 01) was not written for the oilfield, and three of its features surprise energy buyers on their first claim.

Pollution. Exclusion f. of CG 00 01 removes most pollution losses, and many carriers attach a total pollution exclusion (CG 21 49) on energy classes. A tank battery leak, a produced water release, or drift from a frac site lands on a separate pollution policy, not your GL. The dividing lines between GL and the pollution forms are covered in detail on the pollution liability page linked above.

Underground resources and equipment. Carriers writing oil and gas classes frequently exclude or sub-limit damage to the well itself, downhole tools, and the reservoir. If you drill, service, or log wells, the value at risk below the rotary table needs its own treatment.

Action-over claims. In several producing states, an injured contractor employee collects workers comp, then sues the operator, who tenders the claim back to the contractor under the MSA’s indemnity. Standard GL forms increasingly carry action-over exclusions on energy classes, and an MSA that requires you to cover this while your policy excludes it is an uninsured contractual liability.

How much does oil and gas insurance cost?

For most small and mid-size energy businesses, the insurance program runs roughly 1% to 3% of revenue, with contractors at the higher end because of auto and workers comp weight. 

The cheapest program is rarely the defensible one. The premium moves most when you change limits on the coverages your contracts require, so the right order of operations is: pull the insurance exhibit from your MSA or lease, price the program that satisfies it, then decide where higher limits are worth buying beyond the minimum.

Insurance requirements in the main producing states

The requirements that matter are contractual and regulatory, and they travel with the work.

• Texas. Operators file a P-5 with the Railroad Commission and post financial security for plugging obligations; the security is a bond or letter of credit, not an insurance policy, but underwriters ask about it. Texas is also an action-over state, which shapes GL pricing for contractors.
• Oklahoma and New Mexico. Similar operator bonding regimes through the Corporation Commission and the Oil Conservation Division. New Mexico’s anti-indemnity statute voids some MSA indemnity language, which changes what your GL actually has to absorb.
• North Dakota and Pennsylvania. Bakken and Marcellus work concentrates trucking and water hauling exposure; auto is the premium driver, and radius and cargo class get underwritten hard.

Workers comp is statutory in every producing state, and monopolistic-state rules (Ohio, Wyoming for WC) affect multi-state crews. If your people cross state lines to reach the pad, tell your broker before the policy is issued, not after the claim.

Who actually writes this business

The national carriers with public energy appetite write the middle market and up. Small operators and service contractors are mostly placed through excess and surplus lines markets and energy-specialty programs, accessed through wholesalers. That matters to you for one practical reason: the application is the underwriting. Across the energy accounts we place, the submission decides the outcome more often than the risk does. A submission with a clear description of operations, five years of loss runs, and your MSA’s insurance exhibit gets quoted; a bare ACORD often gets declined without a look. Equipment schedules ride alongside on an inland marine form, covered on our contractors equipment insurance page, and vehicle fleets on commercial auto.

Frequently asked questions

It is the program of policies an energy business carries: general liability, workers comp, commercial auto, equipment, pollution liability, and for operators, control of well. No single policy covers oil and gas operations; the segment you work in determines which combination you need and which exclusions have to be closed.

Operators need GL, control of well (OEE), pollution, property, and WC. Service contractors need GL with oilfield endorsements, WC, auto, an equipment floater, and usually a $5M umbrella to satisfy MSAs. Midstream and downstream businesses add fixed-site pollution, business interruption, and transportation pollution.

Partially. CG 00 01 covers third-party bodily injury and property damage, but on energy classes it commonly arrives with pollution, underground resources, and action-over exclusions attached. The program exists to close those three gaps with separate coverage.

Plan on roughly 1% to 3% of revenue. A small service contractor typically lands between $25,000 and $75,000 a year, driven by workers comp payroll and truck count rather than by the GL itself.

Travelers, Chubb, Berkley, Zurich, AIG, and Liberty Mutual publish energy appetite for the middle market. Most small energy businesses are actually written by E&S carriers and specialty programs accessed through wholesalers, which is why working with a broker who knows those markets matters more than the logo.

Upstream covers exploration and production: wells, rigs, and the crews around them. Midstream covers gathering, processing, storage, and compression. Downstream covers refining and distribution: terminals, bulk plants, and fuel jobbers. Underwriters price each segment on different exposures, so programs are not interchangeable.

Control of well, also called operators extra expense. It pays to regain control of a blowout, redrill the lost hole, and cover seepage from the well. Contractors are not usually named for it, but MSAs often require them to carry pollution and high liability limits instead.

Most modern leases and surface use agreements require GL at $1M per occurrence and often pollution coverage, with the lessor as additional insured. The lease’s insurance clause functions like a mini MSA: read it before renewal, because coverage certificates get checked when something goes wrong.

A common oil and gas GL restriction that removes coverage for damage to the well, the hole, downhole tools, and the reservoir itself. Drilling and well-servicing contractors need the exclusion removed or bought back, or the largest property damage claim they can cause is uninsured.

Yes, in every producing state, and payroll class codes for drilling, well servicing, and roustabout work carry some of the highest WC rates in commercial insurance. Contractors deploying crews internationally also need foreign voluntary workers comp, which domestic WC does not provide.

No. Solar, wind, and other renewable operations are underwritten as their own class with different markets and forms. Energy companies running both should keep the programs separate rather than forcing one policy to stretch.

Access. Most energy risks are written in E&S and program markets that do not deal directly with insureds. A specialist broker matches your operations to carriers with real appetite, packages the submission underwriters expect, and reads your MSA and lease requirements against the quotes before you bind.

Get your oil and gas program reviewed by Alliance Risk

Oil and gas insurance is not one policy. It is a program, usually five to nine coverages across multiple carriers, and the failures happen in the seams: a GL with a total pollution exclusion sitting under an MSA that requires pollution coverage, an umbrella that does not list the auto policy it is supposed to sit over, a well interest with no OEE behind it. Getting the program right costs a small share of revenue. Getting it wrong has ended operators after a single event.

Coverage is half of it. The other half is what underwriters price: your MSA discipline, your driver files and MVR pulls, your maintenance and hot-work procedures, your loss runs. Insurance pays the claim. The program you run decides what you pay next year.

We place energy business across admitted, E&S, and specialty program markets rather than one appetite, so we can tell you which carriers write your class, which will decline you and why, and where your current program has holes. If your incumbent already has it right, we will say so.

Send us your MSA’s insurance exhibit, your current declarations pages, and your loss runs. We will map the requirements against the coverage, show you the gaps, and answer your questions before you commit to anything.