Insurance Requirements for Oilfield Contractors Working in Texas

Nate Jones, CPCU, ARM, CLCS, AU
6 days ago
2 min read

Texas is one of the nation’s largest hubs for oil and gas operations, making it a prime state for oilfield contractors. However, working in Texas comes with unique insurance requirements that contractors must meet to operate safely, comply with state regulations, and secure contracts with major operators.

At Wexford Insurance , we specialize in helping Texas oilfield contractors obtain customized insurance coverage that meets operator requirements and protects employees, equipment, and business assets.

General Liability Insurance in Texas

General Liability Insurance protects contractors against claims of property damage or bodily injury to third parties. In Texas, major operators often require:

$1M per occurrence / $2M aggregate minimum limits
Contractors to be listed as “Additional Insured” on operator certificates
Waiver of Subrogation endorsements in some cases

Having proper general liability coverage is essential for vendor approval and bidding on contracts.

Workers’ Compensation Requirements

While Texas allows some flexibility for small employers, workers’ compensation is strongly recommended for oilfield contractors due to the high-risk nature of the work. Coverage protects employees injured on the job and shields the business from potentially devastating claims.

Major operators often require contractors to carry Workers’ Compensation insurance—even if state law does not mandate it.

Commercial Auto Insurance

Oilfield contractors frequently use trucks, trailers, and heavy-duty vehicles to transport equipment. Texas operators typically require commercial auto insurance with:

Combined single limits of $1M or higher
Coverage for all vehicles used in oilfield operations

Accidents on remote or high-risk sites can be costly, making this coverage essential.

Pollution Liability & Environmental Coverage

Oilfield operations in Texas carry environmental risk, especially near drilling sites, pipelines, and fracking operations. Pollution liability insurance protects contractors from claims related to spills, leaks, or contamination.

Without adequate coverage, contractors may be barred from certain operator contracts or face significant out-of-pocket expenses for environmental incidents.