Top Insurance Claims Oilfield Contractors Face and How Insurance Helps

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

The oil and gas industry is inherently high-risk, and oilfield contractors face unique challenges on a daily basis. Accidents, equipment failures, and environmental incidents are common, making comprehensive insurance essential for protecting your business. Understanding the most common claims can help you better prepare and reduce potential liabilities.

At Wexford Insurance, we specialize in helping oilfield contractors secure tailored insurance policies nationwide, ensuring your operations are fully protected.

1. Workplace Injuries and Workers’ Compensation Claims

High-risk tasks, heavy machinery, and hazardous work environments make workplace injuries the most frequent claim for oilfield contractors. Workers’ Compensation insurance covers medical expenses, lost wages, and rehabilitation costs for employees injured on the job.

A strong safety program not only protects employees but can also help lower premiums and reduce the frequency of claims.

2. Equipment and Property Damage Claims

Oilfield contractors rely on expensive equipment such as drills, rigs, and transport vehicles. Damage from accidents, fire, or natural disasters can result in costly claims. Equipment and Property Insurance ensures that your tools and machinery are repaired or replaced without draining your business’s finances.

3. Commercial Auto Claims

Many oilfield contractors operate vehicles for transporting equipment or traveling to remote worksites. Accidents involving company vehicles can lead to commercial auto insurance claims, including liability, property damage, and bodily injury. Insurers often consider mileage, driver experience, and vehicle type when determining rates.

4. Pollution and Environmental Claims

Oilfield operations carry the risk of environmental incidents, including oil spills, chemical leaks, and soil contamination. Pollution Liability Insurance protects contractors against cleanup costs, legal fees, and claims from third parties affected by environmental damage.

Environmental compliance is critical, and having the right insurance coverage ensures

your business can handle unforeseen accidents.

5. Liability Claims

Contractors may also face lawsuits due to third-party injuries or property damage. General Liability Insurance protects your business from costly legal defense fees, settlements, and judgments. Major operators like Chevron, Shell, and BP often require proof of liability coverage before awarding contracts.