What is Rigs/Energy Insurance?
Rigs and energy insurance is a specialized form of commercial coverage designed to protect businesses operating in oil, gas, and energy sectors. This includes operators of drilling rigs, well servicing contractors, pipeline construction firms, and equipment manufacturers. These businesses face unique operational hazards—from blowouts and equipment malfunction to transportation risks and job-site accidents—that require tailored protection.
The coverage typically addresses property damage, liability exposures, and business interruption, offering a financial safety net in case of unforeseen incidents in high-risk environments.
Who Needs It
This type of insurance is essential for companies involved in exploration, drilling, production, and servicing within the energy sector. Common policyholders include:
- Oil and gas contractors
- Drilling rig operators
- Pipeline installers
- Well servicing companies
- Equipment rental and manufacturing firms
For example, an equipment fire at a remote drilling site could lead to both property loss and liability claims—making appropriate coverage critical.
What It Typically Covers
Rigs and energy insurance policies are usually customized, but core protections often include:
- Property coverage – for rigs, pumps, and other physical assets
- General liability – to cover third-party injury or property damage
- Commercial auto exposure – for vehicles used in operations
- Equipment coverage – including mobile and rented units
- Environmental liability – in the event of pollution or spills
Many insurers also offer endorsements for inland marine and business interruption, depending on your operational scope and asset deployment.
Common Exclusions or Limitations
While coverage can be broad, there are common exclusions to note. Most policies do not cover:
- Wear and tear or mechanical breakdown without resulting damage
- Intentional acts or gross negligence
- Unreported equipment or locations
Understanding underwriting factors—such as safety protocols, training, and past claims—is key to minimizing exclusions and securing comprehensive protection.
Factors That Influence Cost
Premiums for rigs and energy insurance vary based on several factors:
- Type and value of equipment insured
- Scope of operations and geographical location
- Claims history and risk management practices
- Number of job sites and transportation exposures
Companies working in coastal or offshore regions may face higher premiums due to elevated environmental risks and regulatory scrutiny.
Proof of Insurance & Compliance
Most clients, vendors, and regulators require proof of liability and property coverage before allowing operations to begin. A certificate of insurance (COI) serves as evidence of coverage and may include additional insured endorsements, depending on contract terms.
Staying compliant with local and industry-specific insurance requirements is essential for uninterrupted operations and contract eligibility.
How to Get a Quote
To get a tailored quote, you’ll need to provide business details including the type of rigs or equipment used, number of employees, operational zones, and any existing risk management procedures. Brokers specializing in energy insurance can guide you through coverage options and exclusions.
Get a customized rigs and energy insurance quote today.
For enhanced coverage options, explore programs like the Oil and Gas Drilling Rigs and Equipment Insurance or the Energy Select Program by RISC Inc. which cater to contractors and operators in the energy sector.
Frequently Asked Questions
What types of rigs are typically covered under this insurance?
Coverage can extend to land-based drilling rigs, workover rigs, and well servicing units, depending on the policy structure.
Does this insurance cover environmental damage?
Some policies include environmental liability coverage, but it often requires a specific endorsement. Always review your policy details.
Are subcontractors covered under my policy?
Subcontractor coverage varies. You may need to add them as additional insureds or require them to carry their own policies.
Is offshore drilling eligible for coverage?
Yes, but offshore operations typically involve higher risks and stricter underwriting, which can affect premiums and availability.
How soon can I get proof of insurance?
Once your application is processed and coverage is bound, certificates of insurance can often be issued within 1–2 business days.
Still have questions? Talk to a local insurance expert.