Insurance for Edmonton Oil and Gas Companies

December 5, 2024 / 5 mins read

Oil and gas companies and contractors face specific risks like flammable gases, spills and leaks, explosions, and equipment problems. Do you have enough liability insurance for your Edmonton oil and gas operation?

Customized insurance for your Edmonton oil and gas operation will help financially protect you from liability claims and minimize potential losses.

If you own an oil and gas operation or you are an oil and gas contractor or consultant in Edmonton’s energy sector, your Western Financial Group business insurance expert will give you top commercial insurance advice and at the right value for you.

Western is a trusted, national insurance brokerage that has partnered with Canada’s top insurance companies to provide commercial insurance. We work with our insurance partners to find the best coverage for your business insurance needs.

We make the process easy by getting insurance quotes for you and giving you policy coverage options that you can choose for your Edmonton oil and gas company’s specific needs.

What is oil and gas insurance?

The oil and gas industry requires specific coverage to ensure compliance and minimize risk. Whether your business is international or services the Alberta or the Canadian market, it’s important to have the right insurance to protect your Edmonton oil and gas operation.

Oilfield insurance covers property damage, injury, and damage to the environment. It provides coverage in case of an accident due to the harsh working conditions, chemicals and equipment that are part of the oil and gas industry.

What is wellhead insurance?

Wellhead insurance is used in the oil and gas industry to describe commercial general liability (CGL) insurance. A wellhead is the physical structure of the well above the ground.

Commercial general liability insurance covers the wellhead should there be third-party (client or supplier) property damage or bodily injury as a result of the wellhead’s operations.

Who needs oil and gas insurance:

Oilfield consultants
Oilfield service technicians
Drilling rigs
Downhole operations
Land surveyors
Well servicing
Welders
Pipefitters
Drilling completions and workovers
Site supervisors
Rig managers
Specific contracts or projects

How much does insurance cost for an Edmonton oil and gas business?

There isn’t a set price to insure an Edmonton oil and gas business.

The following factors are usually considered when determining the cost of your insurance:

Your location(s)
The kind of work you do
Your equipment
Annual revenues
Number of employees
Any past claims

Why your Edmonton company needs oil and gas insurance

A supplier has tripped over some equipment left near the wellhead and has a broken wrist and concussion. He has sued you. Your wellhead insurance (commercial general liability insurance) can help pay for the injured person’s medical expenses, lost wages, and your legal expenses.

Area residents complain that one of your company’s wells has polluted their drinking water and they have tests done to prove it. Your pollution liability insurance can help pay for the cleanup costs and any municipal or provincial fines against your company for the damage to the water source.

Your Edmonton oil and gas office is vandalized, including computer equipment. Commercial property insurance can help cover the costs of replacing equipment and getting your office repaired.

What’s in an insurance package for Edmonton oil and gas companies?

Commercial general liability (CGL) insurance

CGL insurance is also known as wellhead insurance in the oil and gas industry.

This type of insurance helps cover claims made by a third-party (client or supplier) regarding liability for property damage, injury, and related expenses. In the oil and gas industry, commercial general liability needs to be more comprehensive than for other industries because of the high risk.

Professional liability insurance

This type of insurance is also called errors and omissions insurance, or professional liability insurance, covers liability claims resulting from professional services or advice.

E & O insurance is essential for an Edmonton oil and gas company or consultant that offers services and advice to other companies.

Pollution liability insurance

Oil and gas work can be exposed to environmental liability claims. Pollution liability insurance covers clean-up costs, third-party bodily injuries (such as illnesses due to your excavation work), or damage to a nearby property caused by pollution or toxic substances from the excavation site.

Tools and equipment insurance

Any item valued at less than $1,500 is considered a tool. Anything valued above $1,500 is considered equipment.

Tools and equipment insurance provides financial protection for any transportable tools or equipment that your Edmonton oil and gas business uses to do work.

Tools and equipment Insurance can provide reimbursement to repair or replace tools and equipment if they are lost, damaged, or stolen. Insured events apply to tools and equipment that are vandalized, stolen, lost, or damaged by fire or flood.

Mobile property insurance

If you regularly move equipment to different work locations as part of your oil and gas business, mobile property insurance provides coverage for property that you don't store at a fixed location, or for equipment routinely taken off site.

Mobile property insurance covers transit. It also covers theft that could happen due to property not being stored in a secure location, as opposed to commercial property insurance that covers property generally expected to be in a designated location.

Equipment breakdown insurance

Equipment breakdown insurance provides coverage for property damage from the sudden and accidental breakdown of insured equipment not automatically covered by a standard commercial property policy. You’ll need to have a list of the equipment that’s at your Edmonton oil and gas business and how much it’s worth.

Commercial property insurance

It provides financial support to replace or repair your oil and gas company’s office or equipment storage warehouse if it is damaged by a flood, fire, or severe weather. It also covers vandalism and theft.

Commercial property insurance also covers the building’s contents such as computers, furniture, tools, equipment, and inventory. Commercial property coverage also extends to protect others’ property that is under your care.

Cyber liability insurance

Do you keep client information online and take online payments? If so, your Edmonton oil and gas company could be hacked by cyberthieves. Cyber liability insurance will help protect you financially from a cyber-attack.

Without cyber insurance, you will have to pay out of your pocket for the cost of restoring your computer system. You may also be liable for damages to third parties whose information has been stolen and you may have to pay for notification expenses to inform your customers affected by a breach.

Commercial vehicle insurance is important

When you or your employees are on the road travelling to a job site in Edmonton and anywhere in-between, commercial vehicle insurance may cover your vehicles in the case of an accident. Your personal vehicle insurance will not cover you in the case of an accident if the work is related to your business.

Here’s an insurance checklist for your Edmonton oil and gas business:

Do you have the best oilfield business insurance rate that suits your work?
Do you have the right amount for your deductible and regularly review it to make sure it’s the right amount for you?
Are you or your employees using personal vehicles for work?

What do I do if my Edmonton oil and gas business has an insurance claim?

Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
Know your policy so that when you contact your broker you are familiar with what will be covered or not.
Document the damage. Take photos right away and write down what happened.
Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.

Western Financial Group has licensed BUSINESS INSURANCE EXPERTS to get your Edmonton oil and gas company the right commercial insurance package. Our experts are available now to help you navigate the commercial insurance journey to protect your oil and gas operation.