Insurance Requirements for Oil Drilling Contractor to Work With Major Operators
- Nate Jones, CPCU, ARM, CLCS, AU
- 6 days ago
- 2 min read
Updated: 5 days ago
Major oil operators such as Chevron, ExxonMobil, and Shell impose strict insurance requirements on drilling contractors before allowing them to mobilise crews, equipment, or vehicles to a site. These requirements help operators manage risk in an industry where severe injuries, environmental hazards, and high‑value equipment exposures are common.
If you’re a drilling contractor preparing to bid or secure work with a major operator in 2026, here are the core insurance coverage you will need, and why they matter.
1. Workers’ Compensation Insurance
Oil and gas extraction remains one of the highest‑risk U.S. industries, with OSHA documenting significantly elevated injury rates and severe injury trends among drilling and well‑service contractors.
Operators require drilling contractors to carry valid workers’ compensation for all employees, including floor hands, derrick hands, motor hands, and even certain subcontractors. Many operators will not issue gate passes or approve MSAs (Master Service Agreements) without proof of WC coverage meeting state law and operator‑specific limits.
2. General Liability Insurance
General liability is mandatory for drilling contractors performing any upstream work. GL protects operators if your crew causes:
Property damage
Bodily injury
Completed‑operations issues
Accidental incidents involving high‑risk tasks
Drilling operations fall under OSHA’s 29 CFR 1910 general industry standards for oil & gas extraction, which impose strict safety and hazard‑control requirements. Major operators require GL to ensure financial backing if an incident occurs.
3. Commercial Auto Insurance
Operators require commercial auto insurance for:
Crew trucks
Hotshot units
Fuel delivery units
Rig‑moving vehicles
FMCSA’s CSA safety program directly influences auto premiums and contract eligibility, as operators actively monitor fleet scores. High CSA violations can prevent contractors from being approved.
4. Pollution Liability Insurance
Traditional liability policies exclude pollution, so operators require standalone or endorsed pollution coverage to address:
Drilling fluid releases
Fuel spills
Contaminated soil/water
Blowout‑related pollution
Pollution exposures are tied to drilling operations addressed under API RP 54, which outlines safety and hazard‑control requirements for well‑servicing and drilling.
5. Excess/Umbrella Liability
Chevron, Exxon, Shell, and other majors often require umbrella limits. This protects operators against catastrophic losses involving drilling rigs, well‑control failures, vehicle accidents, and major injuries.
Why Meeting Operator Requirements Matters
Failing to meet these insurance requirements can result in:
Denied MSA approval
Removal from bid lists
Delayed mobilisation
Contract termination
Proper coverage is both a compliance requirement and a competitive advantage.
Meet Operator Requirements With Wexford Insurance
Wexford Insurance specialises in oil & gas contractor insurance nationwide, helping drilling contractors meet the exact coverage requirements mandated by Chevron, Exxon, Shell, and other major operators.
👉 Request an oil & gas insurance quote from Wexford Insurance today and get fully compliant for operator contracts.
