An Overview Of Oil And Gas Insurance

The oil and gas sector is one of the most profitable to work in, but it is also one of the most dangerous. Most of the time, a single act of neglect on-site can result in the loss of numerous lives, including individuals who have no knowledge what is happening.

As a result, employment in the business is extremely sensitive, and oil and gas insurance is essentially required.

Furthermore, oil and gas insurance goes beyond safeguarding life to secure assets and vital vessels used in exploration.

An overview of oil and gas insurance

The oil and gas insurance industry is unique in that there are various potentially hazardous circumstances that might arise while working. In essence, when industry moves from offshore to onshore, activities such as war, terrorist infiltration, civil upheaval, and kidnapping are possible.

This is because the vast majority of oil exploration sites are located in distant areas. Furthermore, oil and gas insurance often covers a broad range of the sector, including exploration, transportation, production, and refining.

As an employer, obtaining insurance for your oil and gas company should not be negotiable.

Why do I need oil and gas insurance?

Oil and gas insurance is very important because of the nature of the work.

In reality, the industry consists of a limitless amount of procedures, harsh and difficult working conditions, and chemical reactions that increase risk.

The tendency of loss of human life and environment is very high in this industry. Therefore, this is why everyone and asset needs to be insured to cover a good percentage of the liability should an accident occur.

What does oil and gas insurance cover?

Oil and gas insurance policy is very flexible and could be designed to cover several general and specific premeditated incidences.

However, its coverage generally includes:

• Business interruption, property, and third party liability insurance for companies, and independent operators. Also,
• most companies provide cover for drilling contractors on-site that is involved in production and exploration.
• Employee benefits schemes depending on the company and the benefits it offers to its employees.
• Kidnap insurance (very important for high-profile staff working in areas prone to kidnapping)
• Political evacuation insurance that protects companies and staff from the hassle and cost of emergency relocation and transportation due to rising political unrest.

What are the benefits of oil and gas insurance?

Oil and gas insurance have the following benefits:

• Protection against oil risks
• Third-party liability protection
• Cost of control, re-drilling and cleaning of well
• Operators extra expenses (OEE)
• Coverage of all operational risks including onshore and offshore physical damages

Where can I purchase oil and gas insurance?

Not all insurance companies offer oil and gas insurance in Nigeria. However, a handful of them do, which includes the following:

• Leadway insurance
• Allianz insurance
• AXA Mansard
• AIICO general insurance
• Standard assurance plc
• NICON insurance
• Alliance and General Insurance

Bottom Line

Oil and gas insurance is critical for the protection of company assets, including life and property. This is especially true because it benefits all parties involved by safeguarding the corporation, its employees, and the insurance company in all three directions.