Do You Have an Excluded Oil & Gas Exposure?
Fracking is big business in Texas and elsewhere. For many contractors, the fracking boom came along just in the nick of time as the recession set in. The intensity of gas drilling has turned many small burgs in Texas into booming energy towns. The insurance carriers have taken notice and that is not necessarily a good thing. Case in point Nationwide Insurance:
Questions around drilling insurance made national news last week, when an internal memo circulated at Columbus, Ohio-based Nationwide Mutual Insurance Co. revealed the company was not covering damage caused by gas drilling in policies signed by contractors and landowners who've leased their land for drilling.
Saying exposures related to drilling are "too great to ignore," Nationwide also said it wouldn't cover the many contractors, such as truck companies or pipeline layers, who help in the drilling process. The memo, which was supposed to stay internal, was posted on the websites of several anti-drilling organizations. Nationwide later confirmed the letter was legitimate.
The Berkley Mid-Atlantic Group, a Virginia-based insurance operation working across a number of Mid-Atlantic states, also announced to brokers last month it would exclude oil and gas operations from policies "due to the large loss potential associated with these operations," according to an email provided to the Post-Gazette.
Berkley provides insurance to commercial operators such as contractors and the hospitality industry, and wants any of those clients venturing into the oil and gas industry to seek coverage from a sister company, said President and CEO Kevin Nattrass. That means if a trucking company covered under Berkley is contracted to haul wastewater for a driller, that company's oil and gas work would be excluded from its original policy.
Read the whole article here. Contractors working with and dabbling in the fracking boom BEWARE! Check your policy!