Pollution Policies for Hidden Disasters

Jeff-Parent

CCIG Insurance Advisor Jeff Parent

The oil and gas industry works hard to avoid any harm to the environment. Yet problems crop up. Leaky wells and chemical spills can contaminate the ground or even water supplies. The damage to a company’s reputation can be even worse.

When these issues erupt, insurance helps put things back on track, right? Actually, not in every case.

If you’ve experienced a “sudden and accidental” event – a blowout, for example – you can typically count on a general liability or “control of well” policy that covers events that occur at a specific date and time.

But what if the problem began some time ago and was only now discovered? What if it developed slowly, undetected for days, weeks or even months? Then what?

As it turns out, you could be facing a coverage gap, leaving you to deal with a potentially devastating problem on your own. Fortunately, customizable, standalone environmental policies are available that are designed with oil well operators in mind.

These policies also merit consideration if your business has anything to do with producing, storing or emitting hazardous waste materials. Contractors involved in cleanup and abatement projects also should consider an environmental policy.

The big advantage with these policies is that they cover events that are gradual in nature as well as those that are sudden and unexpected. And they typically include emergency response and evacuation expense coverage.

Such policies also include a review of spill prevention plans before an emergency arises. Environmental policies also can cover the cost of responding to some of the negative publicity that often accompanies oil and gas industry accidents. In other words, you will be able to recover the cost of hiring a public relations or crisis communications firm.

As noted by the National Association of Insurance Commissioners, the use of hydraulic fracturing in shale and gas extraction has meant greater exposure to the insurance industry. In part, that’s why environmental insurance isn’t always easy to find and premiums vary widely.

As we know, the oil and gas industry has always faced liability exposures. But with today’s increased regulatory scrutiny and heightened public awareness, it’s more important than ever to work closely with an insurance broker who understands the industry and can help you discern what might easily be overlooked.

Jeff Parent is an Insurance Advisor at CCIG who has worked with oil and gas clients since 1999. He can be reached at jeffp@thinkccig.com or at 720-330-7918.