Lower Drilling Contractor Insurance Premiums (Without Cutting Coverage)
- Nate Jones, CPCU, ARM, CLCS, AU
- 6 days ago
- 2 min read
Updated: 5 days ago
In oil & gas, costs are rising, but cutting critical coverage isn’t the answer. Instead, use targeted risk controls that underwriters reward to lower drilling contractor insurance premiums while keeping protection intact.
1) Align your safety program to OSHA + API RP 54
Demonstrate a written program that maps to OSHA’s Oil & Gas Extraction standards (29 CFR 1910), PPE, fall protection, HAZCOM, emergency planning, and document training and audits. Pair this with API RP 54 practices for drilling/well‑servicing (risk assessments, flowback controls, equipment integrity). Strong compliance reduces incident frequency, a key pricing driver.
2) Improve fleet safety to influence commercial auto rates
Underwriters review your DOT/CSA history. Lower violations across BASICs (unsafe driving, HOS, vehicle maintenance, hazmat) to improve your FMCSA CSA profile, insurers associate better scores with lower loss expectancy. Use driver coaching, preventive maintenance, and documentation to show progress.
Pro tip: Add telematics (speeding/harsh‑brake alerts, dash cams). Fleets that deploy telematics see fewer crashes and increasingly earn better terms from carriers due to improved risk data.
3) Manage your workers’ comp e‑mod (experience modification factor)
Your NCCI e‑mod directly impacts workers’ comp premiums. Focus on loss frequency (near‑miss reporting, Job Safety Analyses, return‑to‑work) because frequent small claims push the e‑mod up faster than one large claim. Know that e‑mods are calculated from the last three complete policy years (excluding the most recent), so improvements take time but pay off at renewal.
4) Tighten subcontractor and contract risk transfer
Require COIs with verified limits (GL/auto/workers’ comp/pollution if applicable) and hold‑harmless/indemnity language aligned to operator requirements. Clean risk transfer prevents loss creep into your program and supports more favourable underwriting.
5) Right‑size deductibles and coverage structure
Consider modest deductible increases on predictable lines (auto physical damage, inland marine) while keeping liability limits intact. Underwriters often price more competitively when you retain manageable first‑dollar risk and prove strong controls (OSHA/API compliance, CSA improvements, telematics, e‑mod plan).
Get a Smarter Oil & Gas Insurance Program with Wexford Insurance
You don’t need to cut coverage to cut costs. Wexford Insurance works with oil & gas carriers nationwide and can benchmark your CSA data, e‑mod trajectory, telematics results, and contract requirements to negotiate better pricing, without weakening protections.
👉 Request a drilling contractor insurance quote from Wexford Insurance today and start reducing premiums the right way.
