Oilfield contractor insurance questions, answered

A small roustabout company working under an operator MSA usually needs five policies: general liability, commercial auto, workers compensation, an umbrella or excess policy, and inland marine for tools and equipment. Pollution liability is often required too. The MSA sets the limits and endorsements, so the contract, not the size of the company, decides what "enough" means.

No. Chapter 127 of the Texas Civil Practice and Remedies Code does not require mutual indemnity or mutual insurance. It voids oilfield indemnity for the other party’s negligence unless the parties agree in writing that the indemnity will be supported by liability insurance. A mutual obligation is then enforceable to the extent of the coverage each side agreed to carry, while the insurance required to support a one-way (unilateral) obligation may not exceed $500,000.

Your operator wants your liability policy to pay first when a claim involves your work, and to pay without asking the operator’s own insurance to chip in. "Primary" means your policy responds before theirs. "Non-contributory" means your insurer will not seek contribution from their policy. On a standard general liability policy this is usually done with ISO endorsement CG 20 01, which applies only when you agreed to it in a written contract.

A blanket additional insured endorsement automatically makes any party you have agreed in a written contract to cover an insured on your liability policy, without listing that party by name. For oilfield contractors, it lets one policy satisfy MSAs with several operators. The coverage only reaches as far as the contract requires and only for claims arising from your work.

In practice, yes. Produced water is oil and gas waste under Texas Railroad Commission rules, and a standard commercial auto policy has a pollution exclusion that limits coverage for spills of what you are hauling. Most produced water haulers need a pollution buy-back on the auto policy (such as ISO endorsement CA 99 48) and often a contractors pollution liability policy for spills during loading, unloading, and work on location.

If your insurance documents in ISNetworld stop meeting a hiring client’s requirements, that client sees the deficiency on your grade or status for its account, and what happens next is the client’s call, not ISN’s. Some clients will hold new work until it is fixed. The fix is almost always the same: find the exact requirement you are missing, correct the policy or the paperwork, and resubmit for review.

A waiver of subrogation is an endorsement where your insurer gives up its right to recover a claim payment from the operator (or another party named in your contract). Oilfield MSAs require it on general liability, auto and workers comp so that a claim paid by your insurance stays paid, instead of turning into a lawsuit against the company that hired you.

Most oilfield MSAs commonly ask for $1M per occurrence and $2M aggregate on general liability, $1M combined single limit on auto, $1M/$1M/$1M on employers liability, plus an umbrella. The umbrella is where requirements vary most and where contractors are most often short, and the amount usually climbs with the hazard of the work.

Often it does not, because many MSAs expressly carve gross negligence and willful misconduct out of the knock-for-knock indemnities. Where the MSA is silent or tries to include it, Texas law is not settled: Texas courts require indemnity for a party's own negligence to be stated expressly and conspicuously, and courts of appeals have disagreed on whether public policy allows releasing or indemnifying gross negligence.

An MCS-90 is a federally required endorsement on a motor carrier's auto liability policy that guarantees payment of a final judgment for public liability up to the federal minimum, even if the policy would otherwise not cover the loss. It protects the public, not you: if the insurer pays only because of the MCS-90, you agree to reimburse it.

Texas law does not require most private employers to carry workers comp; coverage is elective under Texas Labor Code § 406.002. In practice, oilfield contractors almost always need it anyway, because operator MSAs and compliance platforms require it, along with employers liability and a waiver of subrogation.

Most rejected oilfield certificates fail for one of a handful of reasons: the named insured does not match the company that signed the MSA, required endorsements (additional insured, primary and non-contributory, waiver of subrogation) are not shown or not attached, a limit is short, the umbrella does not cover what the MSA requires, a policy is expired, or the certificate holder is wrong.

A master service agreement (MSA) is a standing contract between an operator and a service company that sets the terms for all future work: indemnity, insurance, payment, safety and how jobs get ordered. Each job then runs on a work order or field ticket under it. For your insurance program, the indemnity clause and the insurance exhibit are the two sections that matter most.

A certificate of insurance is a one-page summary of your policies, usually on the ACORD 25 form, that your agent issues to an operator or a prequalification platform. It shows which policies you carry, the limits and the dates. In Texas, Insurance Code Section 1811.152 says a certificate "is not a policy of insurance and does not amend, extend, or alter the coverage" of the policy.

Ongoing operations additional insured coverage protects the operator for injury or damage that happens while your work is underway. Completed operations coverage protects the operator for injury or damage caused by your work after it is finished, such as a connection you made that fails months later. On standard ISO forms they are separate endorsements: CG 20 10 or CG 20 38 for ongoing, CG 20 37 for completed.

A notice of cancellation endorsement is a change to your policy that requires the insurer to notify someone besides you, usually the operator, before the policy is cancelled. IRMI describes it as an endorsement that provides notice "beyond that stipulated in the policy," either more days, more parties, or both.

Often, yes, as long as you raise it before you sign the MSA. Insurance requirements are contract terms, and operators set them per vendor. ISNetworld, for example, says hiring client requirements "can be configured by location, level of risk, or specific designations." The best asks are specific: name the clause, say what you can deliver, and explain why.

Contractual liability coverage is the part of your general liability policy that pays when you have agreed in a contract to take on someone else’s liability, such as an operator’s, for bodily injury or property damage. The standard GL form excludes liability assumed by contract, then gives it back for an "insured contract," which includes the part of any business contract where you assume another party’s tort liability.

"Company Group" is a defined term in many oilfield MSAs that lists everyone on the operator’s side of the indemnity: the operator, its affiliates, often its co-owners and joint venturers, its other contractors, and all of their employees and sometimes insurers. "Contractor Group" is the same idea for your side.

Not always the same limits, but they need insurance that protects you and the operator for the work they do. Some MSAs put your subcontractors in "Contractor Group," which means injuries to their people can fall on your side of the indemnity. If a sub has thin coverage, your policies can end up paying.

ISNetworld’s Review and Verification Services (RAVS) team checks the insurance documents you or your agent submit against each hiring client’s requirements. ISN says the review can cover policy limits, insured parties, self-insured retentions, deductibles, insurer financial ratings, and effective and expiration dates, plus "certain policy endorsements" when a hiring client asks.

A hold harmless clause is a promise in a contract that one party will cover certain legal liabilities of the other. IRMI treats "hold harmless" and "indemnity clause" as the same thing. In an oilfield MSA, it is the language that says who pays when someone is hurt or property is damaged.

If you service oil, gas or water wells in Texas, probably yes. Chapter 127 of the Civil Practice and Remedies Code applies to agreements for "well or mine service," which the statute defines to include drilling, reworking, repairing, testing, treating, perforating, acidizing and logging, and transporting or storing oil, produced water, brine and other liquids, plus equipment rental and incidental transportation tied to that work.

Indemnity is your contractual promise to pay for certain losses of the operator. Additional insured status makes the operator an insured under your liability policy, so it can go directly to your insurer. One is a promise between you and the operator. The other is a right under your insurance policy.

The care, custody, or control (CCC) exclusion is the part of your general liability policy that removes coverage for damage to personal property that is in your care, custody, or control. In the standard ISO form (CG 00 01 04 13) it is exclusion j.(4). For an oilfield crew, that can mean the operator’s equipment you are moving, repairing, or running is not covered by your GL if you damage it.

Underground resources and equipment coverage is an endorsement to a general liability policy for property damage below the surface: oil, gas, water, or minerals not yet produced, the well, hole, or formation itself, and casing, pipe, tools, and equipment downhole. Oil and gas GL policies can exclude this "underground resources and equipment hazard," and the coverage endorsement gives it back.

Usually not as a policy of their own. Control of well insurance, also called operators extra expense (OEE), is written for oil and gas well operators to pay the cost of regaining control of a wild well, plus resulting pollution cleanup and damage to the operator’s property, with options such as relief well coverage. What a service contractor needs is an MSA that leaves wild well costs with the operator, and a liability program that fits whatever the MSA does put on the contractor.

Contractors pollution liability (CPL) is a separate policy that covers third-party bodily injury, property damage, cleanup costs, and defense when pollution arises from your contracting work, whether the release is sudden or gradual. It exists because the general liability pollution exclusion removes most pollution claims. For oilfield contractors, it is how you back up the pollution responsibility an MSA assigns you, typically spills from your own equipment above the surface.

"Sudden and accidental" pollution coverage is a label, not a standard policy. The phrase comes from an exception in the 1973 general liability pollution exclusion, which ISO replaced in the mid-1980s with what is called the absolute pollution exclusion. What is sold under that name today is usually a time-element exception: the release has to start and stop within a short window and be discovered and reported to the insurer within a set number of days.

An umbrella policy sits over your general liability, auto, and employers liability, adds limits when those are used up, and can also cover some claims they do not, subject to a self-insured retention. An excess liability policy only adds limits on top of an underlying policy and is no broader than it. MSAs often accept "umbrella or excess" to meet a limit requirement, but the two do not always deliver the same coverage to the operator.

Hired and non-owned auto (HNOA) is liability coverage on a business auto policy for vehicles your company uses but does not own: vehicles you lease, hire, rent, or borrow (hired, symbol 8) and vehicles like employees’ personal pickups used in your business (non-owned, symbol 9). Your general liability policy will not fill this gap, because it excludes autos.

Contractors equipment coverage is inland marine insurance for your own tools and mobile equipment, the gear that moves from job to job: welders, pumps, generators, light towers, compressors, and similar equipment. It pays to repair or replace that equipment after a covered loss. Your general liability policy will not, because it excludes property you own.

Employers liability is Part Two of your workers compensation policy. It covers damages you legally owe because of an employee’s work injury that fall outside workers comp benefits, such as a third party’s claim against you over your employee’s injury, consequential injury claims by family members, and suits against you in a capacity other than employer. The standard limits in the Texas manual are $100,000 each accident, $100,000 each employee by disease, and $500,000 disease policy limit, and MSAs often ask for more.

In Texas, a workers comp waiver of subrogation is added with the Texas Waiver of Our Right to Recover from Others Endorsement, WC 42 03 04. It stops your comp insurer from recovering the benefits it paid for your injured employee from the party named in the endorsement, usually the operator, but only for bodily injury arising out of the operations described and only where a written contract requires the waiver.

A Texas nonsubscriber is a private employer that has chosen not to carry workers compensation insurance, which Texas Labor Code Section 406.002 allows. The tradeoff is in Section 406.033: if an injured employee sues, a nonsubscriber cannot defend on the grounds that the employee was contributorily negligent, assumed the risk, or was hurt by a co-worker’s negligence. The employee still has to prove the employer was negligent.

Often, yes. General liability covers bodily injury and property damage. It is not built for a claim that your inspection, test, or report was wrong and cost the operator money with no physical damage, and some GL policies for inspection firms carry an exclusion that removes inspection work altogether. Professional liability, also called errors and omissions (E&O), is built for those claims.

There is no honest single number. Your premium is built from a handful of inputs: payroll by workers comp class code, your experience mod, how many trucks you run and how far they go, your revenue or payroll for general liability, the limits the MSA forces you to buy, and your loss history. Change any one of them and the price moves.

An experience mod (also called EMR or mod) is a factor that compares your actual workers comp losses to the losses expected for a company with your payroll in your class codes. A 1.00 is average. Below 1.00 is a credit that lowers your premium, and above 1.00 is a debit that raises it. In Texas, mods effective on or after July 1, 2015 are calculated under NCCI’s Experience Rating Plan with Texas exceptions.

TRIR (total recordable incident rate) is the number of OSHA-recordable injuries and illnesses your company had, scaled to 100 full-time workers for a year. The formula from the Bureau of Labor Statistics is: recordable cases times 200,000, divided by total hours worked by all employees.

A class code is a category in the workers comp manual that describes a type of work. Your insurer assigns your company one or more codes, puts each employee’s payroll in a code, and charges a rate per $100 of payroll for each. In Texas the codes come from NCCI’s Basic Manual for Texas, and the rate is the NCCI loss cost for that code times your insurer’s loss cost multiplier.

A loss run is a report from your insurer listing the claims on your policy: dates, what happened, what has been paid, and what is still reserved on open claims. A new insurer uses it to price your renewal, and some operators ask for it.

Generally yes. The standard ISO business auto form (CA 00 01) covers accidents in the coverage territory, which includes the United States, and nothing in it limits coverage to public roads. A covered truck on a private lease road is still a covered auto.

If you haul oil and gas waste for hire, by any method other than pipeline, off the lease, unit or property where it was generated, the Railroad Commission of Texas requires a waste hauler permit. For years that requirement sat in Statewide Rule 8 (16 TAC 3.8). Under the RRC’s rewritten waste rules effective July 1, 2025, it is in 16 TAC 4.193.

If you carry Texas workers comp, your comp policy pays the employee’s benefits, and comp is generally the employee’s exclusive remedy against you. But the employee can still sue third parties, including the operator, and your insurer can seek to recover what it paid from them.

A new oilfield service company needs the same core program as an established one: general liability, commercial auto, workers comp with employers liability, an umbrella or excess policy, and usually pollution liability and equipment coverage. Your first MSA sets the limits and endorsements.

It can, through two documented channels. First, fewer and less frequent injuries improve your experience mod over the following years, and the mod is applied directly to your workers comp premium. Second, insurers can apply schedule rating credits for risk characteristics the base rate does not capture, and a well-run safety program is the kind of thing underwriters look at.

Often yes. If you operate commercial motor vehicles in interstate commerce, generally 10,001 pounds or more, federal rules require you to register with FMCSA and get a USDOT number before you begin operations. If you run only in Texas, TxDMV requires intrastate registration for commercial motor vehicles over 26,000 pounds, vehicles hauling placarded hazardous materials, and some others, and you must have a valid USDOT number before you apply.

A per project aggregate endorsement gives each designated project its own general aggregate limit on your general liability policy, instead of every job sharing one aggregate for the year. The standard ISO form is CG 25 03, Designated Construction Project(s) General Aggregate Limit. Its location-based counterpart is CG 25 04, Designated Location(s) General Aggregate Limit.