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Insurance is key for the oil and gas industry
The author, Mr Peter Makhanu
What you need to know:
- The development of the oil and gas industry will require a huge fundamental role by insurance as it promotes effective risk transfer solutions, leverage mechanisms for financing structure, financial protection of the assets...
The oil and gas industry is constantly evolving – and so is the exposure, hence the need for diverse insurance. From operators and drillers to service contractors and manufacturers of related parts and products, there are unique risks at every stage of the oil and energy process.
With so many years serving this industry, we have developed specialised expertise, products, and services to help oil and gas companies protect their employees, business and assets, and ultimately their long-term viability.
Businesses operating in the oil and gas industry typically need a combination of specialised property, medical, inland marine, life and other commercial general liability coverages designed to address the unique risks presented by oil and gas operations. In addition to a robust general liability policy, oil and gas production businesses should consider getting the full cover to provide better protection. Here are some insurance covers that the oil and gas industry should explore.
General liability insurance policies: These typically cover you and your company for claims involving bodily injuries and property damage resulting from your products, services or operations. It may also cover you if you are held liable for damages to your landlord’s property. Oil and gas operations have many potential dangers for example, in the case of a fire or spill in operations, you need to control your risks with an insurance cover that insures you against an oil spillage, pollution clean-up costs incurred due to accidental pollution that results from a well out of control event, legal liability for pollution-related bodily injury or property damage arising from a well out of control event, and/or re-drill and other extra expenses incurred to restore the well to its pre-loss condition.
Employers’ liability policy: protects employers against legal liability under common law, negligence or breach of statutory duty for damages and claimant’s costs and expenses of litigation in respect of accidents, diseases or even death to employees happening in the course of employment. The oil and gas industry is opening doors for many employees and therefore employers need this kind of cover.
Automobile liability enhanced form of third-party liability which pays in excess of the underlying insurance. Coverage pays for property damage and/or injuries to another person caused by an accident in which you are at fault. This coverage is required by most states to legally drive your vehicle.
Professional liability insurance: is a type of business insurance that provides coverage that indemnify insured for all sums which the insured shall become legally obligated to pay for breach of professional duty by reason of any neglect act, error or omission committed or alleged to have been committed while in the performance of professional services by the insured or on their behalf.
Contractor’s plant and machinery: this is done on an annual basis and covers unforeseen and sudden physical loss of or damage to the insured items, necessitating their repair or replacement. Operations in the oil and gas industry encompass a variety of assets, from cars to equipment, from storage tanks to infield property and more.
The development of the oil and gas industry will require a huge fundamental role by insurance as it promotes effective risk transfer solutions, leverage mechanisms for financing structure, financial protection of the assets of companies in the sector, its shareholders, and the environment that the company operates in.
The author, Mr Peter Makhanu, is the managing director, Liberty General Insurance Uganda Limited
