What Insurance Do Oil and Gas Consultants Need?
As an oil and gas consultant, there’s always the risk that you can give erroneous professional advice or that an accident happens as a result of your consulting services. You need insurance for oil and gas contractors to protect your consulting business.
An oil and gas consultant or contactor who provides services to the energy sector needs to protect their consulting business with a liability insurance policy package.
Who needs oil and gas insurance?
- Oil and gas contractors
- Energy consultants
- Drilling supervisors
- Oilfield surveyor
- Environmental consultants
- Pipeline inspectors
- Petroleum engineers
- Pipeline Inspectors
Does oil and gas insurance cover me at different work sites?
Yes, your insurance policy generally covers the different oil and gas sites where you are contracted to work. If you’re providing services at multiple locations, you need to let your insurance provider know to ensure that you have enough coverage.
What’s in an insurance package customized for oil and gas consultants?
The needs of each oil and gas contractor differ, but liability insurance is necessary. There are several main types of liability insurance that most oil and gas contractors will need.
Professional liability insurance
Oil and gas consultants typically need professional liability insurance, also known as errors and omissions (E&O) insurance. This type of insurance protects you in case a client claims that your work was negligent or caused financial harm.
Commercial general liability (CGL) insurance can protect oil and gas consultants and contractors against common claims or lawsuits alleging third-party bodily injury, usually involving a client or supplier, property damage, false advertising, and libel/slander. CGL may cover legal defence costs and medical costs.
Your CGL policy typically covers all your employees. If you work with subcontractors, though, they need to have their own insurance, or you can increase your limit to include them.
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Commercial general liability insurance
Oil and gas contractors need to have commercial general liability, or CGL, insurance to protect them from the risks of property damage and injury to third parties such as clients and suppliers in circumstances related to their business operations. General liability insurance is the most common type of insurance purchased by oil and gas contractors.
Pollution insurance
Because of the risk of potential contamination, pollution insurance is another important insurance coverage for oil and gas contractors to have. Pollution insurance covers property damage and illness caused to third parties by contamination related to business operations.
How is the cost of liability insurance for oil and gas contractors determined?
How high premiums are for liability insurance for oil and gas contractors depends on several factors.
- Where a contractor works affects rates.
- How much insurance is needed will affect liability insurance premiums.
- An oil and gas contractor’s projected annual revenue affects insurance rates because more work means more to insure.
- Lower deductibles mean higher rates and higher deductibles reduce rates.
- An oil and gas contractor’s insurance claims history impacts future rates.
- More expertise and experience means lower liability insurance rates.
- The type of work an oil and gas contractor does affects premiums. Rates are not the same for manual labour and non-physical work like professional advice.
What other kinds of insurance should oil and gas contractors consider?
In addition to liability insurance, it is important for oil and gas contractors to ensure other aspects of their business are covered.
Contractor's equipment insurance
Oil and gas contractors often need expensive, specialized tools to do their work and they should make sure these tools are covered by their insurance policy. Contractor's equipment insurance covers machinery, tools, work clothing, and spare parts in transit and at job sites. It covers circumstances like theft, vandalism, and loaning equipment to others.
Commercial auto insurance
Oil and gas contractors likely need their vehicles for day-to-day business operations and should make sure all of their work vehicles are covered by their oil and gas insurance policy. Commercial auto insurance covers property damage and bodily injury caused by vehicles used for business.
Commercial property insurance
Commercial property insurance protects your business property against fire, vandalism, and theft.
Commercial property insurance protects the building and also provides coverage for your equipment, inventory, furniture, computers, and other electronics. You might also hear it called business property insurance.
Business interruption insurance
Business interruption insurance helps protect oil and gas contractors from unexpected losses that force their business to temporarily cease operations. Business interruption can be costly and result in lost revenue, lost employees, and even long-term closure of a business.
Western Financial Group can help
If you are an oil and gas contractor, talk to your Western Financial Group broker to make sure you have the right insurance for your unique business needs.
