Common Insurance Claims for Oil Well Drilling Contractors & How to Avoid Them
- Nate Jones, CPCU, ARM, CLCS, AU
- 6 days ago
- 2 min read
Updated: 5 days ago
Oil well drilling contractors operate in one of the most hazardous sectors in the United States. With heavy equipment, high‑pressure systems, extreme environments, and remote job sites, it’s no surprise the oil & gas extraction industry experiences a high number of severe injuries and losses each year.
Knowing the most common insurance claims can help drilling contractors reduce risk, strengthen safety programs, and lower premiums.
1. Workers’ Compensation Claims
Worksite injuries remain the most frequent and costly claims for drilling contractors. According to OSHA and CDC injury data, drilling and well‑service workers face hazards such as:
Contact with objects/equipment (over 60% of severe injuries)
Slips, trips, and falls
High‑pressure line failures
Fires and explosions
Prevention Tips:
Implement daily safety meetings and hazard‑specific training
Follow OSHA 1910 standards and API RP 54 for drilling safety procedures
Ensure proper PPE, guardrails, and confined‑space protocols
2. Equipment Damage & Inland Marine Claims
Rigs, drill components, pumps, generators, and high‑value support equipment are vulnerable to:
Mechanical failure
Fire
Transportation damage
Severe weather exposure
Operators rely heavily on expensive drilling assets, and failure often leads to large replacement or repair claims.
Prevention Tips:
Conduct preventative maintenance aligned with OEM and API recommendations
Use job site inspections, equipment logs, and hazard assessments
Protect equipment in transit and verify secure load procedures
3. Commercial Auto Claims
Vehicle collisions are the leading cause of fatalities in the oil & gas industry, representing roughly 40% of worker deaths. Drilling contractors commonly file claims for:
Collision damage
Liability for third‑party injuries
Cargo/equipment loss
Prevention Tips:
Strengthen driver qualification and MVR checks
Implement telematics and dash‑cams to monitor behaviour
Train crews on fatigue management for long rural driving distances
4. Pollution Liability Claims
Drilling operations carry significant environmental exposure, including:
Drilling mud releases
Fuel spills
Contaminated soil or water
Blowout‑related discharges
Most GL policies exclude pollution, making dedicated pollution coverage essential.
Prevention Tips:
Use environmental monitoring systems
Maintain secondary containment and proper waste management
Train employees on spill prevention and rapid response
5. General Liability Claims
Third‑party injuries, property damage, and contractor‑to‑contractor incidents are common GL claims, especially when working around multiple service companies on a crowded drilling pad.
Prevention Tips:
Maintain clear job site control and communication
Enforce contractor on boarding and COI verification
Follow OSHA hazard‑communication standards
Protect Your Oilfield Operation With Wexford Insurance
The right coverage protects drilling contractors from costly claims and keeps them eligible for operator contracts. Wexford Insurance specialises in oil & gas insurance nationwide and matches drilling contractors with policies that meet industry risks and operator requirements.
👉 Request an oil & gas insurance quote from Wexford Insurance today and protect your drilling business the right way.
