Pitfall: Insuring property at book value instead of replacement cost. Oilfield equipment often costs more to replace due to inflation and supply chain delays.
Fix: Base coverage on current replacement cost, not depreciation.
Cost Angle: Underinsurance penalties (coinsurance) reduce claim payments if limits are too low.
Pitfall: Assuming rental companies’ insurance covers you. Their policies usually protect them, not you. Fix: Add coverage for leased/rented equipment on your inland marine policy. Takeaway: Always assume you’re responsible for rented equipment until proven otherwise.
Pitfall: Treating OSHA compliance as separate from insurance. Carriers review OSHA violations when pricing policies. Fix: Maintain strong OSHA logs, training, and compliance. Demonstrating safety lowersrisk scores. Cost Angle: Fewer violations = lower premiums.
Pitfall: Focusing only on physical damage coverage. When operations stop, lost income is often greater than property damage. Fix: Add business interruption coverage to replace income during downtime. Takeaway: The pitfall is overlooking business continuity. The fix is protecting your… Continue reading Business Interruption Coverage in the Oilfield