What insurance do I need as an oil and gas contractor?
As an oil and gas contractor, you work in a fairly unique industry and much of it is high risk. As such, you want to be adequately insured to protect yourself from financial risk, but you also want that insurance to reflect the unique needs of the oil and gas industry.
So, what insurance does an oil and gas contractor need in their arsenal?
Public liability insurance
Public liability cover protects you against claims of injury or damage to property by any third party.
Imagine you’re working on an offshore rig, and you accidentally damage a piece of highly specialised equipment belonging to your client, worth tens of thousands of pounds. Your public liability cover would handle the costs of replacing or repairing the equipment, rather than you having to pay out of your own pocket. Assuming you don’t want to use up any savings you have paying compensation on a claim, public liability should be considered a vital policy to hold.
Professional indemnity cover
In an industry where the financial stakes are so high, professional indemnity cover is another policy oil and gas contractors need to ask themselves if they can do without. It protects you against claims of professional negligence and any resultant compensation pay-outs.
Say you are a drilling engineer, hired to plan the construction of a new well to extract oil. However, you make a mistake in your calculations and don’t make the well deep enough, meaning extra time and budget has to be allocated to the project in order to complete it. As a result, your client sues you for professional negligence to recoup the damages. In this situation your professional indemnity insurance covers the costs for you, protecting you from what could have been a very costly error.
Employers’ liability insurance
Because the oil and gas industry can involve a lot of offshore working, it can take you away from home for long stretches of time. Consequently, you may employ your partner or spouse to do your bookkeeping and admin so that you don’t have to deal with it while you’re away. However, doing so means you may trigger the legal requirement to hold employers’ liability cover; other situations could include hiring a freelance worker.
Employers’ liability covers you for employee illness or injury that occurs in your employee’s line of work where you, as the employer are held liable. So, say the desk chair you purchased for them to work from collapses and causes them injury, they could make a claim against the business, for which your employers’ liability cover would protect you.
Directors’ and officers’ liability cover
Directors’ and officers’ liability insurance protects you, as the director of your limited company, should someone make a claim against you, alleging you have committed a wrongful act. Wrongful acts can include:
- Health and safety breaches
- Breaking company law
- Financial mismanagement
- Workplace harassment or bullying
- Breaches of legislation
In such a heavily regulated industry as oil and gas (particularly when it comes to health and safety), it’s easy to see why this would be useful cover to have. If a client believed you were flouting health and safety legislation, they could make a claim against you. In this situation, your directors’ and officers’ liability cover would prove invaluable provided the actions you took were not deemed to be deliberate or reckless.
Occupational personal accident cover
Again, in an industry that can be very dangerous, occupational personal accident cover is essential to protect your income should you find yourself unable to work for a prolonged period of time. Should you be injured while carrying out your work (or even travelling to and from it) then you will be paid a weekly sum for the length of time you are unable to work, up to a maximum of 52 weeks. Lump sums would be payable to you or your loved ones in the event of your death or should you become permanently disabled.
Imagine you were a refinery engineer and there was a fire at your client’s plant. While you survived, you were badly burned and unable to work for a year while you recovered and had multiple skin grafts. Your personal accident cover would provide you with a weekly sum to help you keep your mortgage paid and food on the table. Or say the helicopter taking you out to a job on an oil rig crashed, causing you to lose your life. A lump sum would be paid out to your nominated loved ones to ease some of their burdens during what would be a terrible time.
All of these types of cover mentioned are available as standard in our extremely handy insurance package for oil and gas contractors.
For more information speak to our expert team today.