Control Of Well Insurance

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Control Of Well Insurance Policy Information

Control Of Well Insurance

Control Of Well Insurance. It's imperative that wells are kept fully functioning in the oil and gas industry. Wells are, after all, one of the most vital components of your business. Given the fact that oil and gas are highly combustible, there is always a risk of an explosion or a fire.

Should that happen, not only would you be looking at serious damages that would need to be repaired, but it's likely that your business would also have to be shut down during the restoration process.

What would you do if a blowout did happen? What would you do if your wells needed to be restored or re-drilled? Would you be able to cover the costs of any of these situations on your own? More than likely, the answer is a resounding 'no'. That's why it's so important to carry a control of well insurance policy.

Control of well insurance helps restore the operations of your oil and gas wells after a well blowout occurs - including coverage for bringing well back under control, legal liability, cleaning up pollution, redrilling and more. Get a fast quote and your certificate of insurance now.

How Much Does Control Of Well Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small control of wells ranges from $97 to $159 per month based on location, number of wells and more.

What Is Control Of Well Insurance?

Control of well insurance (also known as well control insurance), is a specialized insurance policy that is designed to cover all or some of the costs that are linked to regaining the control of an oil or gas well. This type of insurance also provides coverage for cleaning up any pollution that might occur should a blow out, re-drilling, or restoration project were to happen.

In simple terms, control of well insurance is designed to companies in the oil and gas industry, with the coverage they need for any of the risks that are associated with drilling and maintaining a well. The process of extracting gas and oil is a very complex process.

There is always a risk that something could go wrong and a well could sustain damage or become ineffective as the result of an explosion or some other catastrophic event.

Due to the process of extracting oil and gas, containing and stopping the flow of these substances can be very difficult. Trying to regain control of a damaged well can be extremely costly; not to mention the environmental damage that could occur should a well explode or otherwise become damage.

With control of well insurance, any necessary repairs that would need to be made should a well become damaged would be covered. This type of coverage also helps to pay for the efforts that are needed to stop any leaking oil or gas, as well as the cleanup and restoration process. It can also cover the re-drilling of a well after it has become damaged.

Control Of Well Insurance Coverages

Following are four important control of well insurance coverages for oil and gas well operators to consider:

  1. Cost of Well Control - Covers the costs to bring the well under control after a blowout, and to cap or plug the oil well.
  2. Redrilling & Restoration Expense - Covers the costs of restoring the oil or gas well or replacing the lost well by redrilling a new one.
  3. Pollution Cleanup - Covers costs for pollution liability and cleanup and prevention costs to contain or remove toxic substances coming from the well above ground.
  4. Care, Custody, & Control - Covers third party property damage including: contractors' equipment, supplies, and rental tools, piping, and other equipment on site - which are usually damaged to some degree during a blowout.

Investing In Control Of Well Insurance

There are a number of highly reputable insurance companies that provide control of well insurance coverage. The policies they offer are designed to provide coverage for onshore and offshore wells. What a policy will cover varies from insurance provider to insurance provider; however, generally, these policies offer coverage for the following:

  • The efforts that are necessary to regain control of a well after an explosion or other damage occurs.
  • The expense of re-drilling the damaged well.
  • The cleanup efforts and the costs that are associated with them after an explosion or other damage occurs.

The amount of control of well insurance coverage you would need depends on the exact specifications of your business, such as where in you are drilling (on-shore or off-shore) and the size of your wells, for example; however, it is well understood that the limits for control of well insurance are rather high; they can cost into the 7-figure range, if not more.

How Much Does Control Of Well Insurance Cost?

The cost of this type of insurance coverage varies from insurance company to insurance company; it is also based on the specific details of your business. For example, you might need to carry more coverage if your wells are located off-shore, as there is more of a risk for pollution after an explosion; plus, it usually costs more to re-drill a well that has been damaged.

Together with a reputable insurance broker, you can determine exactly how much control of well insurance you need to carry and how much your coverage will cost you.

Control Of Well Insurance

Gas and oil well drilling can be quite lucrative; but, the risks can also be great. By carrying the right type of control of well insurance, you can ensure that your business, your employees, and anyone who lives near the oil well will be well-protected.

Types Of Small Business Insurance - Requirements & Regulations

Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.

Commercial insurance steps in to help you manage these risks, avoiding a situation which requires you to pay exorbitant costs out-of-pocket.

Small Business Information

Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.

Small Business Insurance Information

In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.

The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.

Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.

According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.

Types Of Small Business Insurance

Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:

  • What type of business am I running?
  • What are common risks associated with this industry?
  • Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
  • Does my state require me to carry this type of insurance?
  • Does my lender or do any of my investors require me to carry this type of policy?

A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:

Business Insurance Policy Type What Is Covered?
General Liability InsuranceWhat is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.
Product Liability InsuranceWhat is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.
Commercial Property InsuranceWhat is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.
Business Owners Policy (BOP)What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.
Commercial Auto InsuranceWhat is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.
Commercial Umbrella PoliciesWhat is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.
Professional Liability (Errors & Omissions)What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.
Surety BondWhat is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).


Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.

Business Insurance Required by Law

If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.

Your insurance agent can help you check applicable state laws so you can bring your business into compliance.

Other Types Of Small Business Insurance

There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:

  • Business Interruption Insurance
  • Commercial Flood Insurance
  • Contractor's Insurance
  • Cyber Liability
  • Data Breach
  • Directors and Officers
  • Employment Practices Liability
  • Environmental or Pollution Liability
  • Management Liability
  • Sexual Misconduct Liability

Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.

Additional Resources For Miscellaneous Insurance

Find informative articles on miscellaneous businesses including the types of commercial insurance they need, costs and other considerations.


Miscellaneous Business Insurance

An insurance contract is an agreement where one party obligates itself to make good the financial loss or damage sustained by a second party when a designated event occurs. The event must be fortuitous and happen by accident. The named insured must have insurable interest at the time of loss. One final point is that in order for any contract to be considered insurance, there must be a risk of loss.

Fortuitous Event - An occurrence largely beyond the control of any involved party; happening by chance; accidental; for example: fire, lightning, windstorm, explosion or flood.

Insurable Interest - In order to recover from a loss to property, the holder must have an insurable interest in the property at the time of the event or occurrence. An insurable interest is any right, title or interest in property where the holder of that right, title or interest sustains financial loss if the property is damaged or destroyed. Any lawful and substantial economic interest in the safety or preservation of the property from loss, destruction or damage also constitutes an insurable interest.

An entity does not have to be the property owner to have an insurable interest in it. Examples include, but are not limited to, mortgagees, trustees, vendors, lessees and bailees. Insurable interest for any entity must exist at the time the loss occurs.

Risk Of Loss - If property could never be destroyed, there is no risk of loss. If property must necessarily disintegrate or be destroyed, there is no risk of loss. Between these two extremes is the exposure of risk that can be insured.


Control Of Well Insurance
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