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OIL & GAS CONTRACTORSPLUS
Broker Presentation
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Peace Hills has written commercial insurance for oil and gascontractors for a number of years but our appetite within this classhas been somewhat restricted.
Our liability wording update presented an opportune time to reviewthe coverage we were providing to oil and gas contractors as well as
the classes of contractors that fell within our appetite.
Our findings indicated a need to:
broaden our appetite to include some additional oil and gas riskclasses
develop a better, more competitive coverage package
and so we have.
Introducing . . .
Introduction
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Oil and Gas Contractors Plus
A Commercial Insurance
product tailored to meet
the needs of independent contractors performing
operations in the Oil & Gas field
by
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Minimum 3 years in business*
Minimum 1 year doing the same type of work
Maximum $750,000 gross receipts* Operations restricted to within Canada
No more than one loss exceeding $10,000 or two losses of anysize within the last 3 years
Operations must fall within the Target Classes listed
*Some flexibility permitted. Please contact your Peace Hills underwriter.
General Eligibility Requirements
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Consultants(including Safety consultants), with hands-on or no hands-on exposure, andcontractors engaged in any of the following eligible classes:
Battery Operators (including incidental pigging of feeder/ gathering lines), FieldOperators/Pumpers, Oilfield
Maintenance with hands-on exposure.oNoconsulting work, electrical or mechanical maintenance or repairs to production equipment or workinvolving repair of valves greater than 4
Electrical ContractorsNoprocess control installations
No Instrumentation
Excavating Contractors
Fence Construction Contractors
Nowelding
TARGET CLASSES
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Geologists (Well Site) NoE&O cover for analysis
Grass Mowing contractors including Incidental weed sprayingwith backpack sprayers Nounlicensed spraying applicators
No spraying using a boom
Insulation Contractors Noasbestos abatement
Landman (Land Agents)
Land Reclamation Contractors Noremediation
TARGET CLASSES
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Lease clearing & Site Preparation Contractors No land remediation operations
Noburning of any kind
Lease Road Construction and Maintenance
Noice road construction / maintenance over bodies of water
Painting Contractors No work in gas plants or refineries
No application of special coatings, liners
Pipefitting Contractors
TARGET CLASSES
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Sandblasting Contractors No work outside of the oil patch
Nolead abatement
Seismic Clearing Contractors Noburning operations
Seismic Drilling Contractors Nouse of explosives
Nosetting or shooting the charges
Site Supervisors
TARGET CLASSES
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Snow Removal Contractors No Municipal or outside of oil patch
Steam Cleaning/Thawing No other use of equipment such as cleaning equipment or buildings
outside of the oilfield and Nocleaning of inside of tanks
Welders, Oilfield only with B Pressure Oilfield WeldingCertification No hot tapping or hot line tie-ins
TARGET CLASSES
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Crude Oil, Condensate or Water Hauling
Drilling Contractors - Oil or Gas Wells
Environmental Contractors / Consultants
Equipment Haulers
Fishing Contractors
Hot Shot Services
Instrumentation Technicians
INELIGIBLE CLASSES
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Maintenance, Service, Installation & Repair of:
Blow Out Preventers
Fishing tools
Mud motors
Mud pumps
Pigs
Power tongs
Shock tools
Stabilizers
Stuffing boxes
Sucker rods
INELIGIBLE CLASSES
Slickline Stuffing Box
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Offshore operations of any kind
Operations outside of Canada
Owners of producing or refining properties
Picker Service, Crane Operations
Pigging of Larger Diameter Pipelines
Pilot Vehicles
Pipeline construction contractors
INELIGIBLE CLASSES
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Remediation Contractors
Testing Contractors (Non-Destructive Testing)
Vacuum Truck Operators with or without
Pressure Truck Operations
Wireline Services
INELIGIBLE CLASSES
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OILFIELD CONSULTANTS
Are individuals who: have a combination of formal training and hands on
experience
are contracted as independent contractors by Oil Companiesfor their area of expertise
are hired to act in a supervisory type role
Peace Hills Insurance does not accept generic consultants or
those whose area of expertise falls within the Ineligible Classeslisted above
Ask for specific details of their area of expertise
About Consultants . . .
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SAFETY CONSULTANTS
Consult and inspect job sites to ensure workers are meeting safetyrequirements
Liaise with the Oil Company to help prevent injury losses
Work on loss control issues
Provide safety training using material by the Oil Company,Occupational Health and Safety or other organization recognized inthe Industry
Peace Hills Insurance does not wish to entertain Safety Consultantswho design / write their own training material, safety guidelines ordevelop their own safety programs
About Consultants . . .
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A fully completed Oil
and Gas CommercialLiability InsuranceQuestionnaire should
capture most of therelevant details we need to determine the eligibility of
the risk and
appropriately price the risk
This form is available on ourwebsite now
QUESTIONNAIRE
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All Oilfield Welders must
complete the Oilfield
Welding Operations
Supplement(last 2 pages of the Oil and
Gas Questionnaire form)
QUESTIONNAIRES
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Description of Operations
Paramount to have a full understanding of the applicants operations not only limited to a specific contract but for operations the applicant could do or is
qualified to do
obtain past experience
Consulting only or and Hands-On work?
Any decision making? If so, on what basis?So that we may determine the hazard level, we need to know:
If the applicant merely consults by observing or reporting to Oil Company
If the applicant is involved with direct supervision for the Oil Company
If the applicant is involved in hands-on work
Questionnaire Form Key Areas
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Area of Expertise
In what area is the applicant working?
Site preparation / set up / road construction
Seismic work: Clearing land / drilling / setting charges
Oil / Gas drilling operations
Oil / Gas servicing operations
Oil / Gas shut downs or workovers
Pipeline supervision / inspecting / construction
Who signs off on completed work?
Is applicant supervising / inspecting any welders or their work? If so, any hands on workfor applicant?
Is work followed up by x-ray inspectors or hydrostatic test?
Questionnaire Form Key Areas
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Education & Qualifications
What are applicants academic qualifications
What certificates does applicant hold Welders must have held a Provincial or Red Seal Pressure Welders Ticket for
a minimum of two years (three years preferred)
What was past employment in the Oil patch or otherwise
How is he/she qualified to give these opinions
Most consultants lack any sort of professional accreditation
Questionnaire Form Key Areas
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Loss Experience & Job Experience
Obtain prior loss history whether insured or not
Applicant must have a minimum of one year experience, but three years is
preferred. A minimum of two years experience is required for welders. We consider number of years experience in related field. Experience in other
areas may be considered relevant or not, so should also be reported
Territory of Operations
Watch for consultants going offshore or outside of Canada
Watch for applicants involved with sales, installation or manufacturing forworldwide exposures. Worldwide policy
should be obtained elsewhere.
Questionnaire Form Key Areas
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Rating Basis
Gross Revenue
Is the total revenue for all operations prior to any deductions foroverhead costs / operating expenses
taxes
cost of materials / supplies
salaries / wagescost of sub-let work
is not take home pay or profit
Obtainnumber of employees
number of contract employees
cost of all sub-let workconfirmation subcontractors supply proof of insurance
limit of insurance subcontractors are required to carry
Does applicant have manpower needed to effectively fulfill terms of the contract?
Does the gross revenue figure reported make sense?
Questionnaire Form Key Areas
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Minimum coverage includes:
$2,000,000 Commercial General Liability Coverage Form 7001(2012 revision). (up to $5,000,000 limits available)
Plus Liability (Oil & Gas Contractors) Form 9052
Oil & Gas Contractors Plus Form 9025
Any other Peace Hills Insurance standard Commercial Property /
Casualty coverage form may be added as requiredsubject to separate deductibles and premium charges if applicable
Coverage Package
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Plus Liability (Oil & Gas Contractors) Form 9052
The PLUS Forms
Amendments to Definitions
o Pollutants amended to include the products used in or generated by oil or gasexploration, development or production including oil, gas, condensates, saline ordrilling fluids
o
Professional Services amended to include geoscience, detection or scanningservices
o Offshore operations definition added
o Oilfield consultant definition added (not professionals)
o Professional definition added
o Underground property definition added
Forest Fire Fighting Expense ($250,000 sub limit) $2,500 Ded
Oilfield Towing ($50,000 sub limit) $1,000 Deductible
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Pollution Deductible Endorsement
o Spills Deductibles
Territorial Limitation Endorsement
o Coverage Territory restricted to Canada only
SPF #6 Non Owned Automobile
SEF 99 (Excluding long term lease vehicles)
SEF 94, $50,000 All Perils, $1,000 Deductible Legal Liability forPhysical Damage to Hired Automobiles
The PLUS Forms
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The PLUS Forms
Contractors Equipment ($25,000 Unscheduled ) $1,000Deductible
Contractors Miscellaneous Tools ($10,000 Unscheduled)$1,000 Deductible
When scheduled equipment or tools are added, the following optionalcoverages are also available:
o Contractors Equipment Replacement Cost Endorsement
o Rental Reimbursement Coverage, $1,000 per day / $10,000 aggregate
o Ice and Muskeg Extension Form, $2,500 deductible
Motor Carrier Cargo Legal Liability ($25,000 Unscheduled) $2,500Deductible
Oil & Gas Contractors Plus Form 9025
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No coverage provided for bodily injury or property damagearising out of, caused by or contributed to by
the wilful violation of any procedural or safety regulations any hot tap or hot tie-in operations conducted by or on behalf of the
Insured
welding operations performed for demolition or salvage work
welding operations by any person who has not been tested andcertified to perform such work
Welding Operations LimitationEndorsement and Welding Warranty
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Warranty:
Minimum qualifications met, appropriate tickets
Flammables within 40 ft. removed or protected by non-combustibleprotective cover during welding operations
Minimum 20 lb. ULC listed fire extinguisher kept within 20 ft. ofwelding operations
Purging procedures adhered to Fire watch maintained for at least 30 minutes after shutdown of all
torches, electrodes or any open flame
Welding Operations LimitationEndorsement and Welding Warranty
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1. Does Oil & Gas Contractors Plus provide Contractors Limited
Pollution Coverage?
Oilfield contractors often required by contract to have Contractors Limited PollutionEndorsement
.This is the name of an endorsement form used by another company that includes :
1. coverage for spills from the operating parts of contractors equipment2. Coverage for contractors bringing pollutants onto site providing spill fromsuch is discovered within 120 hours and reported within 120 hours of discovery
Peace Hills Insurances standard CGL (2012 version). Includes coverage for spills from the operating parts of contractors equipment. Does not include pollution coverage for contractors bringing pollutants onto site at
this time. This coverage is currently in the development stages and will beavailable for selected risks in
the very near future.
FAQ
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Majority of the eligible risks we write do not bring pollutants
onto site and should be able to have that insurancerequirement in their contracts waived.
Tidy tanks from which contractors refuel their contractorsequipment maybe brought onto site by:
Lease Site or Seismic Clearing contractors
Seismic Drilling contractors
Lease Site Preparation, Road Construction/Maintenance contractors
Excavation contractors
Herbicides brought onto site by weed spraying contractors mayalso be considered to be pollutants
FAQ
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2. Will Peace Hills provide Waivers of Subrogation endorsements?
.Some oil companies indicate in the insurance requirements sectionof their contracts that the contractors policy must contain a waiverof subrogation
. Some oil companies will accept being added as Additional Insured as
this provides a legally implied waiver of subrogation
. Some will only accept a Waiver of Subrogation endorsement
. Peace Hills Insurance does not normally permit a Waiver ofSubrogation on Liability policies, however, if the oil company will not
accept the implied waiver via Additional Insured status and will notwaive this contract requirement, we will provide a waiver ofsubrogation. It will be restricted to work performed by the Insuredunder the specific contract number. You must provide us with thecontract number.
FAQ
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3. Can we add Additional Insureds with 30 Days notice ofCancellation/Termination?
Yes, provided we are supplied with the name and address
and the nature of their interest in our policy.
We cannot provide notice of Cancellation/Terminationwithout an address.
The nature of the Additional Insureds interest in our policywill tell us which endorsement is the most appropriate touse.
FAQ
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4. Should we be adding the Principals as Named Insureds orAdditional Insureds?
It is not necessary to add the principals as Named Insureds.The principals of a corporation are automatically includedunder Section II - Who Is Insured in our CGL wording.
Adding a principal as an Additional Insured would reduce the
coverage available to them under the standard CGL wording.
FAQ
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5. Does our wording provide Contingent Employers Liability?
Yes, via exceptions (i) and (ii) of Exclusion d. Employers Liability:
This exclusion does not apply to:
(i) Liability assumed by the Insured under an insured contract; or
(ii) a claim made or an action brought by a Canadian resident
employee on whose behalf contributions are made by or required tobe made by you under the provisions of any Canadian Provincial orTerritorial Workers Compensation law if cover or benefits have beendenied by any Canadian Workers Compensation Authority.
FAQ
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6. Does our wording provide Contractual Liability?
Yes, again by exception to Exclusion b. Contractual Liability:
This exclusion does not apply to liability for compensatory damages:
2) Assumed in a contract or agreement that is an insured contract,
provided the bodily injury or property damage occurs subsequentto the execution of the contract or agreement. . .
The definition of insured contract lists a number of specificcontracts or agreements and also includes:
That part of any other contract or agreement pertaining to your businessunder which you assume the tort liability of another party to pay forcompensatory damages because of bodily injury or property damageto a third person or organization, provided the injury or damage is causedin whole or in part by you or by those acting on your behalf.
FAQ
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7. My brokerage already has some oil and gas contractors and
consultants written with Peace Hills. What will happen tothose policies on renewal?
. The Oil and Gas Contractors Plus forms will be added at renewalwhich may replace some of the existing wordings
. Renewal premiums will be quoted to you. The premium may belower than last term despite providing additional coverages. Youmay choose to accept the lower pricing or you may choose to renewat the same price as the previous term so that you dont reduce yourcommission income
. Large increases in premiums are not anticipated unless the Insuredsbusiness operations or anticipated gross revenue has changed orboth. You may discuss the reason for the increase with yourunderwriter.
. We may ask that you have an Oil and Gas Questionnaire completed
to augment or update the information we have on file
FAQ
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Your Commercial Lines Underwriterwill provide you with a quotation
A completed questionnaire form is not required to provide a quote butwe do require sufficient information to be able to determine eligibility,to assess the risk, and to determine our terms and conditions
We can quote over the phone or by email, provided sufficientinformation is provided
Contact your Commercial Lines Underwriter to bind coverage
A completed questionnaire form will be required within 60 days ofbinding coverage
We will not be extending quoting / binding authority to our brokers atthis time
Quoting and Binding
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Competitive Pricing
Our pricing was set up to be competitive with other major carriers in
the market place. See the examples below:
Battery Operator, 3 years experience / in business, no losses,$100,000 gross receipts
$2,000,000 CGL, $1,000 Property Damage deductible
$250,000 Forest Fire Fighting Expense, $2,500 Deductible$50,000 Oilfield Towing, $1,000 Deductible
Pollution Deductible Endorsement (Spills Deductibles)
Territorial Limitation Endorsement
$2,000,000 SPF #6 Non Owned Automobile including SEF 99
$50,000 All Perils SEF 94, $1,000 Deductible
$25,000 Unscheduled Contractors Equipment, $1,000 Deductible
$10,000 Unscheduled Contractors Miscellaneous Tools, $1,000 Deductible
$25,000 Unscheduled Motor Carrier Cargo Legal Liability, $2,500 Deductible
@ $950
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Lease Site Preparation Contractor, 3 years experience / in business,
no losses, $250,000 gross receipts
$2,000,000 CGL, $1,000 Property Damage deductible
$250,000 Forest Fire Fighting Expense, $2,500 deductible
$50,000 Oilfield Towing, $1,000 deductible
Pollution Deductible Endorsement (Spills deductibles)Territorial Limitation Endorsement
$2,000,000 SPF #6 Non Owned Automobile including SEF 99
$50,000 All Perils SEF 94, $1,000 deductible
$25,000 Unscheduled Contractors Equipment, $1,000 deductible
$10,000 Unscheduled Contractors Miscellaneous Tools, $1,000 deductible
$25,000 Unscheduled Motor Carrier Cargo Legal Liability, $2,500 deductible
@ $1,450
Competitive Pricing
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Competitive Pricing
Pipefitter, in business 4 years, no losses, $195,000 gross revenue,Third Party engineer signs off on all work . . .
$2,000,000 CGL, $1,000 Property Damage deductible
$250,000 Forest Fire Fighting Expense, $2,500 deductible
$50,000 Oilfield Towing, $1,000 deductiblePollution Deductible Endorsement (Spills deductibles)
Territorial Limitation Endorsement
$2,000,000 SPF #6 Non Owned Automobile including SEF 99
$50,000 All Perils SEF 94, $1,000 deductible
$25,000 Unscheduled Contractors Equipment, $1,000 deductible
$10,000 Unscheduled Contractors Miscellaneous Tools, $1,000 deductible
$25,000 Unscheduled Motor Carrier Cargo Legal Liability, $2,500 deductible
@ $1,750
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Oilfield welder, in business 7 years, B pressure ticket, no losses, no hottie-ins, no pipeline construction, no general welding, $225,000 grossrevenue, Third Party inspects/approves work
$2,000,000 CGL, $1,000 Property Damage deductible
$250,000 Forest Fire Fighting Expense, $2,500 deductible
$50,000 Oilfield Towing, $1,000 deductiblePollution Deductible Endorsement (Spills deductibles)
Territorial Limitation Endorsement
$2,000,000 SPF #6 Non Owned Automobile including SEF 99
$50,000 All Perils SEF 94, $1,000 deductible
$25,000 Unscheduled Contractors Equipment, $1,000 deductible
$10,000 Unscheduled Contractors Miscellaneous Tools, $1,000 deductible$25,000 Unscheduled Motor Carrier Cargo Legal Liability, $2,500 deductible
@ $2,500
Competitive Pricing
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Your continued support is greatly appreciated
Maintaining profitable results and growing our book of business
in this sector will allow us to consider further expansion of ourappetite down the road
Call yourunderwriter for a quote today!
Come grow with us