Blades Adds Environmental Aid to Oil and Gas Well Operators Policy

PRODUCT: Pollution Control and Mitigation Program

COMPANY: J.H. Blades & Co., Inc., a subsidiary of CGSC North America, both as part of the control of well and liability coverages Blades underwrites on behalf of Berkley Oil & Gas on Gemini Insurance Company paper and in Blades’ Lloyd’s of London Energy Package facilities.

BEST RATING: Gemini Insurance Company: A+ (Superior), Class XV; Lloyd’s of London: A (Excellent), Class XV

AVAILABILITY: Coverage is available through independent agents and brokers.

FOCUS: Oil and gas well operators that experience a fire, “kick”—a troublesome surge in pressure—or other disaster in one of their wells now have double the free expertise to draw from J. H. Blades, which has added a first-response Pollution Control and Mitigation Program (PCMP) to the Kick Assistance Program (KAP) available through its control of well policies.

Before PCMP, only well control and well firefighting experts were allowed to work in the “hot zone,” the area immediately adjacent to an out-of-control well. Environmental experts were not permitted to enter the hot zone until much later, often after preventable pollution damage had occurred.

Now, in alliance with Wild Well Control, Blades provides “not only a well control expert but also an environmental team to manage the environmental impact of a rogue well,” says Brian Krause, formerly a well firefighter and well control specialist and now a well control specialist for Blades.

“The key is early intervention,” says Scott Pierce, vice president at Blades. “We want to be part of the process from the very beginning. That’s where we see our biggest cost-saving and environmental protection impact.”

Blades offers PCMP and KAP seamlessly at no cost, as well as premium incentives to reward insureds for using the programs. “If the insured gets Wild Well involved immediately, that loss does not count against the no-claims bonus,” Pierce says.

In addition to initial pollution containment, Wild Well also works with the insured, loss adjusters and state and federal regulators on any necessary long-term remediation.

“A kick doesn’t happen often, but when it does, it can be devastating to insureds,” Krause says. “To have someone to walk them through—free of charge—is a great advantage to them.”

Dealing with out-of-control wells requires not only handling journalists who are covering the event, but also moving hundreds of endangered people away from the blowout. “Having folks who know how to handle it is great for insureds and, by association, their retailers,” Krause says.

UNDERWRITING: On applications for general liability and well control, Blades requires a schedule of wells, with detailed information on the kind of wells the insured will drill. Limits are negotiable. When the policy is written in Blades’ exclusive facility in London, limits can be $1 billion for 100% interest. Policy term is generally 12 months.

MINIMUM PREMIUM: $3,500 for PCMP, KAP and GL, although J.H. Blades can negotiate lower amounts.

TARGET: Upstream or in-field lease operators, from mom-and-pop shops to large public companies.

COVERAGE TERRITORY: Available on an excess and surplus basis in all U.S. states.

CONTACT: Scott Pierce, vice president; J. H. Blades & Co., Inc., 520 Post Oak Blvd, Suite 250, Houston, Texas 77027; 713-479-6109.

Ronimarie Acord is an IA contributor.