If you are an oil and gas driller, you recognize that you work with a very sensitive commodity. Oil of any form is flammable. However, when drilling, you face an acute risk of fires and explosions. What can you do to reduce the risk of a catastrophic spark? Will your commercial insurance protect you against unforeseeable events?
Fire and explosion coverage for the oil and gas industry exists. In fact, it often comes tailored to these specific risks. Don’t let yourself go without this protection.
Coverage for Platform fires and Explosions
If an accidental fire occurs at a drilling site, your commercial insurance should cover some or all the damage. However, what protection you need to claim will vary.
For most drillers, commercial insurance is not just one policy. Many types of insurance combine to create a comprehensive portfolio of coverage. Most of these will address fire and burn risks as they apply to their areas of protection.
- Property insurance can pay for damage to buildings or other physical assets. You’ll also likely need specialized equipment protection to pay for damage to your rig.
- General liability insurance covers damage a fire causes to third parties. If it damages buildings on neighboring property, this coverage can pay for the losses.
- Pollution liability insurance covers damage resulting from spills related to fires. Keep in mind, this coverage may not apply directly to burn damage itself.
- Workers’ compensation to pay for the injuries or illnesses employees sustain in fires.
Other coverage like commercial auto, inland marine and well control protection might all offer help in case of fires. Your goal should be to construct the most comprehensive level of protection. Let your insurance agent be your guide in determining coverage.
Preventing Fires on Your Rig
Even if you have adequate commercial insurance, you shouldn’t let fires occur anyway. No policy will cover all damage, nor will it cover any intentional fires. Therefore, if you don’t do what you can to prevent fires, you might still face financial losses.
Generally, strict safety conduct rules govern drill sites. As a result, you’ll must abide by all protective steps. These might include refraining from smoking, controlling electrical use and using shock absorbers and spark eliminators. Control the flow of material and keep a lookout for leaks and damage that could raise fire risks. Have emergency equipment on hand to immediately contain risks and open flames.
If you have questions about your options, contact InsuranceOne Agency today at 800.475.0001. We’ll help you get coverage that suits your needs.
Also Read: Common Workers' Comp Incidents on Rigs, and How to Prevent Them