Every oilfield operator strives to prevent seepage and spills, but equipment failures and human error can cause pollution on even the most carefully run sites. You might assume that your general liability coverage will pay the costs of cleanup and liability claims associated with a spill, but environmental damage is usually excluded from those policies.  There are many facets in the realm of oilfield insurance you should discuss with your insurance agent to make sure all gaps are bridged and you have proper coverage to protect the assets and profitability of your operation.

Why Oilfield Insurance Matters 

Serious Coverage Gaps

oilfield insuranceWithout endorsement, your business insurance policies may not cover pollution related losses. If seepage or migration releases oil into the soil, your company may be responsible for the cleanup, as well as any fines or liability claims that may arise. These damages together may total millions of dollars, which could put your company out of business.

What Oilfield Insurance Covers

Due to the nature of gradual pollution events, the damage usually isn’t discovered until oil has penetrated the water table or seeped into a sensitive environment. When this occurs, oilfield insurance can be endorsed to cover the cost of removing contaminated soil, replacing the ground, and taking any remediation steps necessary.

Your insurance company will also help you keep costs down throughout the process, and work with regulatory agencies on your behalf. Their assistance can be vital for minimizing regulatory penalties and protecting your business from the financial consequences of a spill.


Since 1995, Western States Insurance Group, Inc. has provided tailored coverage options to oilfield operations throughout New Mexico and West Texas. They work closely with energy companies throughout the area and have the experience to identify gaps in your coverage, along with the resources to ensure you’re fully protected. To schedule a meeting and request an oilfield insurance review, visit their website or call (575) 396-1318, and follow their Twitter for more helpful tips and advice.