Offshore Energy Insurance

In the United States, offshore energy coverage is most often manifest in the ubiquitous Energy Package Policy. That policy appears in many forms and is very much a product tailored to the needs of the individual assured involved. A great deal of work goes into the underwriting of these policies, which frequently afford hundreds of millions of dollars in coverage to their assureds. Each broker and underwriter tends to approach the various coverages differently, so it is essential that every policy's wording be considered to determine when there are variations from the norm (if indeed there is a norm). Notwithstanding, this Article attempts to review the typical risks that are insured under an Energy Package Policy and some of the common ways in which policy wording addresses those risks. It also discusses recurrent issues more recently presented under these policies and how the underwriters, their assureds, and the brokers have addressed those issues. This discussion is limited to practice in the United States and focuses primarily on situations encountered in the Gulf of Mexico.
Please note that the writer is a lawyer and has no experience in brokering or underwriting energy claims. There are many instances in which these policies work quite well to afford coverage for the risks encountered in the offshore oil and gas business, and in almost all of those instances, counsel are not involved.