Insurance for oil and gas contractors in Ontario
Oil and gas is a major industry in Canada and employs many oil and gas contractors who work for all sizes of contracting companies. Oil and gas contracting firms provide a range of services and products for oil and gas companies from work on pipelines and wells, guidance on operations and design to inspections. It is important for oil and gas contractors to be adequately insured. Fortunately, insurance for oil and gas contractors in Ontario can be tailored to their unique needs.
What kind of insurance do Ontario oil and gas contractors need?
The needs of each oil and gas contractor differ but liability insurance is a must. There are several main types of liability insurance that most oil and gas contractors in Ontario will need.
Commercial general liability
Oil and gas contractors must make sure to have commercial general liability, or CGL, insurance to protect them from the risks of property damage and injury to third parties in circumstances related to their business operations. General liability insurance is the most common type of insurance purchased by oil and gas contractors.
Professional liability insurance
Professional liability, or errors and omissions, insurance is another commonly purchased coverage for oil and gas contractors. It covers property damage and injury caused by non-physical work like inspections and design.
Pollution insurance
Because of the risk of potential contamination, pollution insurance is another important insurance option 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 in Ontario 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 in Ontario 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.
Property insurance
Commercial property insurance covers damage to business property and includes coverage for losses to property belonging to your business. It can also protect you against damage done to the property of others in your care or on your premises. Losses to inventory and repair and replacement costs can be high so it is important that oil and gas contractors in Ontario insure their commercial property.
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.
Your insurance broker can help
If you are an oil and gas contractor in Ontario, talk to your Western Financial Group broker to make sure you have the right insurance for your unique business needs.
