The operations of an oil field include many constant risks and hazards that could lead to catastrophic accidents. Heavy machinery, motor vehicles, flammable substances and high temperatures create a consistent potential for disaster. Even the most diligent and responsible oil field operators may be unable to avert all incidents. With that in mind, having a diverse and robust insurance portfolio is necessary to protect your business from devastating out-of-pocket costs.
What Types of Insurance Does an Oil Field Need?
Given the inherent risks and exposures that could lead to significant losses, many insurance coverages may be necessary for your oil field operation. In general, you should ensure that your portfolio includes the following:
- Workers’ compensation—This coverage can financially protect the health and wellness of your employees and help your business manage the aftermath of workplace injuries or illnesses by helping to pay for the following:
o Medical bills
o Lost or reduced wages
o Disability benefits
o Death benefits
o Legal costs (e.g., representation, judgments, settlements)
- General liability—This type of insurance can provide financial assistance for a third party’s losses arising from the following incidents occurring at your oil field:
o Bodily injury
o Property damage
o Personal and advertising injury
- Professional liability—If a client or customer sues your business for providing products and services that were inadequate, incomplete or late, this coverage can help pay for resulting costs, such as lost income and legal expenses.
- Business property—This coverage focuses on insulating you from losses and damages related to physical property used to operate your oil field, such as the following:
o Structures
o Tools
o Computers
o Inventory
o Furniture
- Commercial auto—This coverage can help pay for various expenses and losses arising from vehicle-related incidents, including third-party damages for which you are liable and repair or replacement costs for your automobiles.
- Equipment breakdown—If the machinery your oil field depends on is damaged or malfunctions, this coverage can provide financial assistance to repair or replace it. Furthermore, this type of insurance may also cover lost income and other expenses resulting from the incident.
- Cyber liability—This coverage can provide financial assistance for costs and losses arising from a data breach or cyber incident, such as the following:
o Restoring or repairing compromised systems
o Cyber extortion (e.g., ransomware payments)
o Notifying affected parties
o Investigating the incident
o Legal costs (e.g., representation, judgments, settlements)
- Inland marine—This coverage financially protects property, products and materials waiting to be transported or in transit over land.
- Employment practices liability—This coverage can help pay for legal expenses and damages if a prospective, current or former employee sues your oil field for improper workplace practices, such as the following:
o Discrimination
o Wrongful termination
o Improper hiring practices
o Sexual harassment
- Commercial umbrella—If a particularly significant incident exceeds the liability limits of your business’s other insurance policies, this secondary coverage can provide additional assistance.
Get the Right Coverage
Thoroughly assessing and addressing hazards is necessary for any business’s regular operations. The working conditions of oil fields make this need even more essential, as even the slightest mistake or lapse in attention could have explosive ramifications.
We’re here to help. For over 30 years, the agents at Area Insurance Services, Inc. have helped individuals, families and businesses in the Midland and Odessa areas protect themselves with optimal insurance solutions. We will work with your oil field to analyze its coverage needs and build suitable policies. Contact us today to get started.