Short answer
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.
- What is different is how you get it. With no loss history and no experience mod, underwriters rely on the owners’ experience, your safety program, your contracts and a clear description of the work.
- Get your regulatory pieces lined up at the same time: USDOT and TxDMV registration if your trucks need them, an RRC waste hauler permit if you haul waste for hire, and the Texas workers comp notices.
Start with the first MSA
Most new service companies buy insurance because an operator is ready to give them work. That operator's MSA is your spec sheet: the policies, the minimum limits, and the endorsements you need before your crew can go on location. Prequalification platforms will check your certificate and endorsements against it.
Read the indemnity and insurance sections together, and have your attorney review the indemnity. Then build the program to the strictest MSA you expect to sign in the next year, not just the first one. Adding an umbrella layer or an endorsement mid-term is possible but takes time you may not have when a job is waiting. See the MSA insurance requirements guide and what limits operators commonly require.
The core program
This is the usual starting point. Your trade changes the emphasis: a water hauler leans on auto and pollution, an inspection company may need professional liability, a well servicing company has more equipment to schedule.
| Policy | Why you need it | Start-up watch-outs |
|---|---|---|
| General liability | Third-party injury and damage from your work; the operator will want additional insured status | Describe operations accurately; the MSA endorsements must be on the policy, not just the certificate |
| Commercial auto | Your trucks on highways and lease roads | List every unit; check how pumps and mounted equipment are treated |
| Workers comp and employers liability | Injuries to your own employees; MSAs commonly require it | Correct class codes from day one; no mod yet |
| Umbrella or excess | Limits above the primary policies to meet the MSA | Make sure it follows the additional insured status the MSA requires |
| Pollution liability | Spills and releases that GL and auto mostly exclude | Often required separately in the MSA |
| Inland marine (contractors equipment) | Your tools and equipment on location and in transit | Schedule high-value units |
What underwriters look at when you have no history
A new company has no loss runs and no experience mod. NCCI notes that a new business with no data available gets a unity (1.00) mod. Underwriters fill the gap with other information:
- The owners' and key employees' experience. Years in the trade, prior companies, and what kind of work they ran.
- Contracts. Which operators you will work for and what the MSAs say.
- Safety program. A written program, training records, a drug and alcohol program, and a driver selection process.
- Vehicles and drivers. A vehicle list with weights and garaging, and the drivers who will be on the policy.
- Projected payroll and revenue by type of work, because those are the exposure bases for comp and GL.
Be precise about the work. Workers comp class codes and GL classifications are assigned from your description, and payroll is audited after the policy ends. A vague description now can turn into an audit bill later. See how class codes work for oilfield crews.
Regulatory pieces to line up at the same time
These are not insurance, but they affect your insurance and your ability to work.
- Texas workers comp notices. Comp is elective for most private Texas employers (Labor Code 406.002), but you must tell each new employee whether you have it and post a notice (406.005). An employer that does not obtain coverage must notify the Division of Workers' Compensation (406.004). Most MSAs make the decision for you.
- Motor carrier registration. If you operate commercial motor vehicles in Texas over 26,000 pounds or haul placarded hazardous materials, TxDMV requires intrastate registration, and it requires a valid USDOT number first. Interstate carriers file with FMCSA before they begin operations. See whether oilfield trucks need a USDOT number.
- RRC waste hauler permit. If you haul oil and gas waste for hire off the lease, you need one, and you need an active P-5 first. See what an RRC waste hauler permit is.
- OSHA recordkeeping. Once you have more than 10 employees, you generally need an OSHA 300 log, which is where your TRIR comes from.
What to send us
The MSA you are about to sign (or its insurance exhibit), a short description of your services, owner résumés, a vehicle and equipment list, projected payroll and revenue, and any prior loss runs the owners have from earlier companies.
Common questions
Can I start with lower limits and raise them later?
You can, but the MSA decides what you need on day one. If an operator requires a limit you do not carry, your certificate will fail review and you will not get on location.
Does my new company get the old company’s experience mod?
Ownership changes and successor companies are handled under experience rating rules that depend on the facts. NCCI notes a unity mod can result when data cannot be provided because of an ownership change. Ask before you assume either way.
Do I need workers comp if I only have two employees?
Texas law does not require most private employers to carry it, but nearly every oilfield MSA does. Without it you also lose key defenses in an employee lawsuit under Labor Code 406.033.
Will a new company pay more?
Without loss history, an underwriter has less to go on. A clear operations description, experienced owners and a written safety program help make the case.
Sources
- Texas Labor Code, Chapter 406. Sections 406.002 (coverage elective), 406.004 (notice to division by non-covered employers), 406.005 (employee notices), 406.033 (lost defenses).
- NCCI: ABCs of Experience Rating. Unity mod for new businesses with no data and certain ownership changes.
- Texas Department of Motor Vehicles: TxDMV Number. Who must register for intrastate operations; USDOT number required first.
- 16 Tex. Admin. Code § 4.193, Hauler permits (Cornell LII). Waste hauler permit requirement for hauling oil and gas waste for hire off the lease.
- 29 CFR 1904.1 (Cornell LII). Partial exemption from OSHA recordkeeping for employers with 10 or fewer employees.
- IRMI glossary: Exposure Base. Payroll and sales as exposure bases for WC and GL.
This page explains insurance, not law. Have your attorney review indemnity and contract language; our job is making the insurance match it.
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