How Much Does Oil Well Drilling Contractor Insurance Cost in 2026?
- Nate Jones, CPCU, ARM, CLCS, AU
- 6 days ago
- 2 min read
For oil well drilling contractors, insurance is a major operational cost, but it’s also essential. In 2026, premiums vary based on coverage type, company size, location, claims history, and operator requirements. Understanding realistic insurance costs helps new and experienced contractors plan budgets and secure operator approvals.
At Wexford Insurance, we specialize in helping oilfield contractors nationwide get proper coverage at competitive rates—ensuring your business is protected without overpaying.
Typical Insurance Costs for Oil Well Drilling Contractors in 2026
While premiums vary, here are approximate annual costs for key policies:
Coverage: $1M per occurrence / $2M aggregate
Typical Cost: $5,000–$15,000/year
Protects against third-party bodily injury or property damage.
Coverage: Statutory limits with employer’s liability
Typical Cost: $8,000–$25,000/year, depending on number of employees and job risk level
Essential for high-risk oilfield operations; often required by operators.
Coverage: Trucks, trailers, and field vehicles
Typical Cost: $3,000–$10,000/year, depending on fleet size and driving record
Protects vehicles and drivers in jobsite operations.
4. Umbrella / Excess Liability
Coverage: Additional $1M–$5M for catastrophic claims
Typical Cost: $2,500–$10,000/year
Often required for contracts with major operators like Chevron or Shell.
Coverage: Spills, leaks, or contamination
Typical Cost: $5,000–$20,000/year, depending on operations and location
Mandatory for some operators, especially in drilling and fracking projects.
Coverage: Drilling rigs, heavy equipment, and tools
Typical Cost: $5,000–$30,000/year, based on equipment value
Protects against theft, damage, or loss on-site or in transit.
Total Estimated Annual Insurance Costs: For a small drilling contractor: $25,000–$50,000.Mid-sized operations: $50,000–$100,000, and large contractors with extensive fleets and equipment: $100,000+.
Why Proper Insurance Is Critical
Even if premiums seem high, underinsuring your drilling operation can cost far more. Claims for accidents, environmental incidents, or vehicle damage can easily exceed $100,000, putting your business at serious risk. Operators will also reject contractors without the proper coverage.
Wexford Insurance ensures your policies meet operator requirements while controlling costs. We specialize in oil & gas business insurance and help contractors:
Get operator-approved coverage quickly
Bundle policies for savings
Maintain compliance year-round
