Definition - What does Oilfield Insurance mean?
Oilfield Insurance is an insurance policy that covers various assets such as wellhead platform, drilling rigs, oilfield equipment and employees working on an oilfield from oil and gas organization activities and any accidents. It also covers any producing or permitted oilfield. The oil and gas industry consists of series of procedures, chemical reactions and harsh and difficult working conditions which tend to increase the risk to cost-intensive property, human life and environment. Thus, the industry needs to be insured to cover certain proportion of the liability in case of any accidents.
Petropedia explains Oilfield Insurance
Oilfield insurance is one of the insurance covers that are provided under oil and gas insurance. The terms of the oilfield insurance may vary from one organization to another. In general, oilfield insurance helps oil and gas sector organizations recover their losses in the event an accident occurs. Due to the increase in the demand of petroleum products, the refining process as well as various processes from crude oil extraction to transportation (supply chain value) and marketing becomes more complex. The oil and gas industry poses unique risks at every stage of the production process, and oilfield insurance provides various plans to cover up the risks of an organization operating in all the three segments of the oil industry. It also helps in protecting the cost-intensive infrastructure, employees, physical assets, etc., and thus helps in long-term viability of any oil and gas operating organization.