Drilling Contractor Insurance

Describe the rig and its contractual role

A drilling contractor submission should explain the rig type, drilling methods, operating territory, depth profile, and services included in the contract. Distinguish a daywork arrangement from other contract structures without assuming any label settles responsibility. The actual agreement may allocate equipment, personnel, well damage, and consequential losses differently.

List which entity employs the crew, supplies the rig, owns downhole tools, and hires specialist service companies. Include ancillary work such as rig moves, site preparation, pressure testing, and maintenance. These activities may introduce exposures that are easy to overlook when a submission is summarized simply as drilling.

Separate rig damage from well-related losses

Physical damage to a rig is a different question from loss of well control, damage to the well itself, pollution, or the cost of retrieving tools. Ask where each exposure is intended to sit in the insurance program and compare that intention with the relevant definitions, exclusions, and endorsements.

Review scheduled values, transit arrangements, leased equipment, and debris removal. Explain any equipment operating underground, underwater, or at another contractor’s direction. A broad equipment description should not substitute for checking limitations on particular property or activities. Keep the owner’s and contractor’s responsibilities visible throughout the review.

Make operational controls part of the submission

Drilling involves work around moving machinery, pressure systems, vehicles, and other hazardous energy. OSHA’s oil and gas guidance is a useful starting point for identifying operational hazards, but the applicable requirements and controls must be established for the specific work. An insurance review does not replace the drilling contractor’s safety program.

Provide training records, maintenance procedures, inspection practices, and incident investigation examples where available. Explain how crews coordinate with the operator and specialist contractors. Underwriters can assess the operation more accurately when the submission shows who controls work, how changes are communicated, and how emergency response is organized.

Review the contract before accepting the job

Collect the drilling agreement, indemnity provisions, insurance specifications, and requested additional insured wording. Ask qualified counsel to evaluate enforceability and the allocation of liabilities. Ask the broker to assess whether the requested insurance terms are actually available and consistent across primary and excess layers.

Identify obligations that remain uninsured or uncertain, including assumed consequential losses and obligations involving another party’s property. A certificate should reflect insurance already arranged; it should not be used to promise contract compliance that has not been checked. Revisit the review when the rig, territory, drilling method, or contract form changes.

Pay particular attention to equipment supplied by the operator but used by the drilling crew. Record who maintains it, who may authorize repair, and who bears loss if it is damaged. This interface can be missed when the contractor schedules only assets on its own balance sheet and the operator assumes the contractor has accepted all responsibility under the drilling agreement.