In the past several years, a unique occurrence has happened in Denton. Denton has become a part of the oil patch. Well, sort of. While it may not be as world changing as Spindletop, it will have some profound effects on Denton and Denton County. For one, it should create another source of revenue both for our citizens as well as our local taxing offices. These future wells will need good knowledgeable people to get them drilled as well as connecting to pipelines. It has also created a boom for some of the local land owners who may have the good fortune to have natural gas located on or more precisely under their land. While this may send you scrambling to determine if you still own the mineral rights to the old family farm, it should also give you a chance to see if this may affect your insurance needs or risk exposure.
There are some very unique insurance concerns in regard to oil and gas drilling. It does compare very similarly to construction in operation. The terms of the personnel and the businesses are difference, such as a well operator, a drilling contractor and a well servicing contractor. The well operator could be compared to a general contractor in construction. This is the person who arranged for the well to be drilled and operated. First, the operator would most likely survey the land and inspect it. The operator would then hire a drilling contractor to actually drill the well. The well servicing contractors are the variety of businesses that service the well and pumps after drilling.
Here are some of the concerns that should be reviewed prior to agreeing to a lease:
1. General Liability: Having a lease on land will allow a good number of personnel to have access to the land. Possible damage can be made to fences and cattle if not properly policed. If the well is being drilled closer to structures, evaluate the valuation of those structures or the people that may live in the structures. Require a good limit of General Liability coverage from every party that comes onto your land, especially the drilling contractor.
2. Automobile Coverage: Require a good limit of coverage for their vehicles on the land for the same reasons #1, in case the damage is done by a vehicle.
3. Workers Compensation: Oil well work, just like construction, is a very dangerous occupation. If a worker is hurt, make sure their employers have workers compensation to address the injury.
4. Property Damage: A Control of Well Coverage: Although the landowner may not own the drilling equipment, they will have an interest in the well and the results of the well. Control of Well Coverage is the policy that actually insures the damages to the well.
5. Equipment Coverage: If the servicing contractor is using their own equipment, this may not be a big concern of the landowner.
For more details on how to insure your gas well or other insurance concerns, contact Ramey & King Insurance at 1-800-453-9691 or visit our office in Denton at 510 N. I-35E, Denton, TX 76205.