Overview
An onshore drilling contractor moves rigs, derricks, drawworks, mud systems, and crews from one well pad to the next to drill and complete oil and gas wells. Rigs are rigged up, operated around the clock, then rigged down and transported, so the operation is mobile, equipment-heavy, and contract-driven. Crews work in shifts around rotating machinery and high-pressure systems in often-remote locations. A tailored drilling program may help align rig property, mobile-equipment, well-control, pollution, and crew protection with the realities of moving and running land rigs.
Part of our energy, utilities & natural resources insurance guidance.
Risk profile
Land drilling risk combines high-value mobile equipment with subsurface pressure control. Rigs and components are expensive and exposed to fire, collapse, and damage during operation and frequent moves over rough roads. A loss of well control or blowout can cause catastrophic damage and pollution, while drilling fluids, mud, and fuel create spill and contamination exposure. Heavy rig moves and trucking drive auto exposure, and crews face some of the most serious injury hazards in energy, from rotating equipment and falls to pressure releases. Operators impose detailed contracts with indemnity, additional-insured, and insurance-limit requirements that shape the program.
Common risks
Rig damage during operation and moves
Derricks, drawworks, and mud systems are high-value and exposed to fire, collapse, and damage both on location and during transport.
Loss of well control or blowout
A failure to control downhole pressure can cause a blowout with catastrophic damage, fire, and significant pollution exposure.
Drilling fluid and fuel spills
Mud, drilling fluids, and on-site fuel can spill and contaminate soil and groundwater, triggering cleanup liability.
Rig-move and trucking accidents
Transporting heavy rig components over rough and public roads creates significant auto and cargo exposure.
Severe crew injuries
Floor hands and crews face falls, struck-by, caught-in, and pressure-release injuries around rotating equipment.
Equipment breakdown on location
Mechanical or electrical failure of drawworks, top drives, or power systems can stop drilling and incur costly repairs.
Operator contract requirements
Drilling contracts commonly require specific liability, pollution, and well-control coverage plus indemnity and additional-insured terms.
Recommended coverages
Coverages commonly relevant to onshore drilling rigs operations. Not every business needs the same policies.
Operational Coverage
Employee-Related Coverage
Additional Protection
Why tailored insurance matters
Land drilling is mobile, high-value, and governed by detailed operator contracts, so coverage built for a fixed facility leaves drilling contractors exposed. A program should reflect the rig fleet and its values, the well-control and pollution exposures, the auto risk of frequent rig moves, and the indemnity and additional-insured terms operators demand. Coordinating rig property, mobile equipment, well-control, pollution, and crew coverage may help ensure a pad incident or rig-move accident does not leave gaps, subject to policy terms. Coverage availability depends on underwriting, safety record, and loss history.
Hypothetical claim examples
Rig fire on location
A fire damages the derrick and drawworks during drilling. Rig property coverage may help with repair and replacement, depending on the cause of loss, policy terms, and exclusions.
Rig-move truck rollover
A truck hauling rig components rolls over en route to a new pad. Business auto coverage may respond to liability and damage, depending on policy terms and the facts.
Mud spill at the well pad
Drilling mud escapes containment and contaminates surrounding soil. An environmental liability policy may respond to cleanup, subject to the specific policy, endorsements, and exclusions.
Hypothetical scenarios for illustration only. Coverage depends on the specific policy, endorsements, exclusions, and facts of each claim.
What affects insurance cost
- Number, size, and value of rigs in the fleet
- Well depths and pressures typically drilled
- Frequency and distance of rig moves
- Crew headcount and safety performance
- Well-control and pollution exposures
- Operator contract indemnity and limit requirements
- Loss history and claims experience
How much does it cost?
There is no single price for onshore drilling rigs insurance — it depends on which of these coverages you carry and the specifics of your business. As a rough guide, here are general national averages for the coverages this business commonly needs.
- $300–$1,000 per year for many small businesses
- $500–$1,500 per year for many small businesses
- Varies widely by operations and site risk — a quote is required
- $500–$3,000 per year, driven largely by payroll and job class codes
- $1,500–$3,000 per vehicle per year
- $200–$800 per year, often added to a property policy
- $400–$1,500 per year per $1M of additional limit
These are general national averages shown for comparison only — not a quote. Actual premiums vary widely with underwriting and depend on the factors above and the specifics of your business, including size, revenue, location, claims history, and the limits you choose. See how we estimate costs.
Coverage considerations
- Schedule rig and mobile equipment values accurately
- Assess well-control and blowout exposure
- Match auto limits to heavy rig-move trucking
- Review operator indemnity and additional-insured terms
- Confirm pollution coverage for mud and fuel spills
Common underwriting considerations
When insurers review a onshore drilling rigs business, they commonly evaluate factors like these. This is educational information — nothing here is collected or submitted.
- Operations performed — generation, distribution, extraction, or services — and where
- Regulatory permits held and compliance history
- Environmental exposures and containment or remediation practices
- Property and equipment values, including specialized and remote assets
- Payroll, employee count, and safety-program maturity
- Claims history, especially environmental and severe-injury losses
Common contractual insurance requirements
Contracts, leases, and licenses in this industry commonly impose insurance requirements such as these. Always review the specific wording in your own agreements.
- Master service agreements in energy commonly set high liability and umbrella minimums
- Operators require additional-insured status and waivers of subrogation from service contractors
- Regulators and permits frequently require pollution liability and financial-assurance instruments
- Right-of-way and land-use agreements carry liability requirements
- Lenders require property coverage on financed infrastructure
Common coverage mistakes
Mistakes businesses in this industry commonly make when arranging coverage — worth reviewing before you buy or renew.
- Relying on general liability for pollution claims that standard forms exclude
- Carrying limits below master-service-agreement thresholds
- Underinsuring remote or specialized equipment that is slow to replace
- Overlooking business income when a single facility drives most revenue
- Missing contractual-liability review on indemnity-heavy energy agreements
Frequently asked questions
How are the rigs themselves insured?
Rigs and mobile drilling equipment are often covered under inland marine or scheduled equipment forms that follow them between locations. The right structure depends on values and how the fleet moves.
Is well-control exposure part of standard coverage?
Well-control and blowout exposure is specialized and often handled through dedicated forms rather than standard property. Coverage depends on underwriting and the specific policy.
Why is auto coverage critical for drilling contractors?
Frequent rig moves over rough and public roads create heavy auto exposure. Business auto may respond to collisions and resulting liability, subject to policy terms.
Do operator contracts dictate my coverage?
Often yes. Drilling contracts commonly require specific liability, pollution, and well-control limits plus indemnity and additional-insured status. We can help align your program, subject to underwriting.
Is equipment breakdown separate from rig property?
Often yes. Property typically covers external causes like fire, while equipment breakdown may respond to mechanical failure of drawworks and power systems, depending on the policy.
What most affects onshore drilling insurance cost?
Fleet size and values, well depths, rig-move frequency, crew safety, and loss history are major drivers. Final pricing depends on underwriting and your operation.
How do I get a quote?
Call The Southern Agency at 1-800-777-1872 or request a quote online for guidance tailored to your onshore drilling rigs business.