Oil and Gas Insurance

Oil and Gas Energy

Course Overview

The oil and gas industry is constantly evolving – and so are the exposures. From drilling operations to service contractors to manufacturers of related parts and products, there are unique risks at every stage of the process. With so many years serving this industry, Travelers has developed the specialized expertise, products and services that can help oil and gas companies protect their employees, their physical assets, their balance sheets and ultimately their long term viability.

By nature, the oil and gas industry faces a myriad of structural and operational risks. Man-made errors, technical faults and natural disasters in challenging and volatile environments are common exposures and serious but inherent threats to the safety of operations. The consequences can be severe and range from damages and monetary losses over environmental pollution to fatalities.

Although the risks vary from operation to operation and impact various business entities and contractors, oil and gas insurance policies offer risk mitigation and loss coverage to protect your business and operations. Delegates of course will gain an in-depth understanding of insurable/uninsurable risks and their impacts across all operations.

 

Course Objectives

  • Learn how to align strategic, operational, legal, and tactical decisions with the structural risks of the industry in challenging and volatile environments
  • Understand the needs of the industry at each stage - including the exploration, construction and operational phases – to effectively mitigate risks
  • Benchmark your policies against the complex exposures in the oil and gas business to protect your assets
  • Analyse emerging risks and trends to evaluate the extent of coverage and critical exclusions that must be addressed
  • Review claims handling issues to develop robust conflicts and dispute resolution strategies
  • Maximize Position - Develop insurance strategy that maximize your position by understanding company’s risk profile and available coverages in the market.
  • Avoid Claims Denial - Determine the suitability of insurers and insurance markets to avoid claims denial by analysing the security ratings and other indicators, underwriting capacity and market conditions.
  • Maximize Claims Recoveries and Minimize Delays - Understand and master claims procedures and handling to maximize the size and speed of claims recoveries and minimize the delays.

Course Outline

Five Key principles of Insurance

  • Introduction to Insurable Interest
  • Utmost Good Faith
  • Indemnity, Subrogation and Contribution

History of the energy insurance market

  • Origins, development, highs and lows

Current insurance market

  • Functions and obligations of the parties

Placement of risk

  • Anatomy of an insurance placement

Managing risk by contract

  • Introduction to indemnities and how they translate to the insurance product

Oil and Gas Industry Risks

  • Risks faced by the industry
  • Insurable and Non-insurable Risks
  • Limited Protections available for Uninsurable Risks
  • Insurable Risks
  • Natural Catastrophe Exposures
  • Marine and Onshore Risks
  • Process Risks
  • Well Related Risks
  • Liability Risks
  • Geo-hazards and Industry Specific Risks
  • Common Risk Issues
  • An Illustrated Overview of Oil and Gas Installations,
  • Equipment and Processes with Consideration of Risk
  • Exposures

Principles of Insurance

  • Insurable Interest
  • Utmost Good Faith
  • Proximate Cause
  • Indemnity

Contractual Philosophies and Risk Allocation

  • How risks are allocated between Oil and Gas Companies
  • and Contractors & Other Parties
  • Influences on Attitudes to the Allocation of Risk
  • The Factors Governing Allocation
  • Contracting Philosophies
  • Allocating and Financing Risk by Contract
  • The Treatment of Property, Personnel & TP Exposures
  • Indemnity Clauses—Examples and Legal Issues
  • Insurance Clauses
  • Provisions of Insurance Policies to reflect Contractual Intent

Construction Insurance

  • Offshore and Onshore Property

Operational Insurance

  • Offshore Fixed and Floating Property (MODUs, FPSOs,etc.)
  • Operational Insurance—Onshore Property

Drilling Risks

  • Operator’s Extra Expenses (OEE) Insurance, etc.
  • Well Control

Insurance Policy Coverage, Terms and Conditions

  • Insurable and Non-insurable Risks
  • Self-Insurance
  • Deductibles
  • Excesses
  • Franchises
  • Scopes of Cover and Limitations

Operational Insurance Packages—An Overview

  • General Provisions
  • Sections Providing Risk Protections—Main Features
  • Fixed Property
  • Offshore Movable Assets
  • Control of Well/Redrill etc. Risks
  • Business Interruption
  • Liabilities
  • Construction

Insurers and the Energy Insurance Market—Analysis

  • Origins and Development
  • The Market in 2015—Market Conditions
  • Security Ratings and Other Indicators
  • Global, Regional, and Local Markets
  • Market Underwriting Capacities
  • Consolidation—M&A (Insurers, Reinsurers and Brokers)
  • Captive Insurers
  • Mutuals, OIL & OCIL Bermuda
  • Re-drilling/Reconditioning
  • Pollution and Clean-Up

Claims

  • Pre Loss Activities
  • Understanding the Obligations and Responsibilities of
  • the Parties
  • Familiarity with Policy Provisions
  • Establishing Claims Procedures
  • Claims Protocols—including ‘Lillehammer International
  • Energy Claims Handling Protocol’
  • Lillehammer Terms of Engagement for Energy Loss

Adjusters

  • Post Loss Activities—Claims Handling, Communication
  • and Reporting Systems, Conflict and Dispute Resolution
  • Role of Loss Adjuster, Surveyor and other agent
  • Maximizing the Claim Recovery
  • Minimizing Delays


Liability Exposure and Pollution

  • How liabilities arise—Statute, Common Law/Tort,
  • Contract, Defamation, Strict Liability
  • Approaches to Coverage—-Occurrence v. Claims Made
  • Coverages and Exclusions
  • Other Aspects
  • Pollution Regimes, OPA, etc.

Tendering for Insurance Services

  • Why tender?
  • What services can be tendered?
  • When it is appropriate to tender?
  • Organizing a tender
  • Evaluation of Tender Submissions
  • Implications for Insurance of the Oil Price Crisis

Third Party liabilities in upstream

  • Classification of liabilities coverage, policy forms, occurrence versus claims made, insuring agreements, exclusions, definitions

Tanker insurance

  • Overview of hull policies for tankers, LNG Carriers etc.

Financing and lender issues

  • Assignment
  • Loss Payee Clauses
  • Assured’s
  • Broker’s responsibilities

Mutual Insurance

  • Overview of coverage and rating plan for OIL Bermuda

Claims Handling Issues

  • Lillehammer Protocol
  • Role of Adjusters
  • Conflicts and dispute resolution
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Course Features
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  • 8 Weeks Online
  • 1-2 Weeks Classes
  • Certified

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