Cover Image for Oil & Gas Insurance: What Is It?

Oil & Gas Insurance: What Is It?

Austin Landes, CIC
5 minute read

The U.S. oil and gas industry is responsible for nearly 10.3 million jobs and accounts for 8% of our national GDP. It has been a critical industry for many states for the last century.

This industry is not without its risks. In fact, the oil and gas industry is one of the most dangerous when it comes to potential employee injuries and business liability. That is why a quality oil and gas insurance program is so important.

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What insurance do oil and gas companies need?

From leasing the land and operating the well to providing manufacturing and fabrication services, each company has unique risks, and thus will have different insurance requirements.

That being said, there are some coverages that almost all oil and gas companies need to purchase.

General Liability

General liability is essential insurance for oil and gas professionals. Due to the industry's risky and litigious nature, this is one of the most critical policies you can purchase.

General liability is your "catch-all" liability coverage; it will cover most claims involving injuring someone or damaging property not belonging to you.

Products/Completed Operations Liability

Although this is usually a component of the general liability insurance policy, it is so important that we decided to add it separately.

Many businesses in the energy sector either build, maintain, or manufacture things used to drill, transport, or refine oil and natural gas products. Let’s say the work is completed or the product is sold. If that product or work fails and either huts someone or damages property, the products/completed operations liability policy pays for a settlement (up to the policy limit) as well as your legal defense team.

Workers Compensation

Depending on what services you are providing for the oil and gas industry, workers comp can be costly. State law – no matter what state you’re in – almost always requires you to have it, too.

Oil and gas workers compensation protects your employees while they are working for your company. This coverage pays for employee medical bills, lost wages, and various other benefits if they are injured.

Pollution Liability

If you are involved anywhere in the supply chain of fossil fuels, or if the failure of your products or work could result in an oil/gas spill or leak, you need this policy.

After all the EPA fines, clean-up costs, and lawsuits, a small pollution event can bankrupt even businesses with excellent balance sheets.

Oil And Gas Insurance Cost

Oil and gas companies account for some of the world’s largest operations as well as many single-person contractors. Each state also handles workers compensation and liability claims in their own way. Because of this, the same policy could have a 50% pricing difference depending on where you operate.

That being said, insurance for pumper-gaugers can start at $1200 annually, whereas the insurance for an energy manufacturing company can start at around $3500, depending on the parts made and the property insured. Insurance is priced according to risk. The larger your operation is and the greater the business liability gets, the more expensive insurance will be.

Top Oil And Gas Insurance Carriers

National American Insurance Company

Often referred to as NAICO, this is a leading insurance company in the oil and gas industry; it underwrites policies for many different business types in the energy sector. They have clients all across the U.S. but focus primarily on states that produce significant oil and gas.

Mid-Continent Group

A subsidiary of Great
American Insurance Group
, Mid-Continent Group focuses on the energy sector. They underwrite general liability, inland marine, auto, and pollution insurance across many states. Unlike many of the energy insurance companies, Mid-Continent will write for businesses of many sizes, which makes them a popular choice for energy companies in the small and mid-size range.


Oil and gas insurance is an important and industry with specific insurance needs. If you need help from a team with extensive oil and gas experience, let us know!

Austin Landes, CIC

About The Author: Austin Landes, CIC

Austin is an experienced Commercial Risk Advisor specializing in property & casualty risk management for religious institutions, real estate, construction, and manufacturing.

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