Claims case study: interpretation of oil producer’s bespoke policy key to payout
Published 09 September 2021
Seawater and toxic gas made a dangerous combination in an oil producer’s water injection pipeline in this claims case that required urgent action while also raising the question of whether the bespoke insurance policy covered first party damage. Read on to find out how Gallagher obtained a favourable claims result.
Our client is an experienced oil producer and explorer with interests in number of oil fields across Australia. To address the risks involved in the client’s operations we had provided the oil producer with a bespoke insurance policy which covered evaluating, monitoring, controlling, removing, nullifying and/or clean-up of the site but this coverage had been rarely, if ever, claimed on.
During routine inspections at one of the oil producer’s major processing facilities a leak was identified in the water injection pipeline between the processing facility and a nearby beach. On closer inspection the leak was found to be a combination of both seawater and hydrogen sulphide which is toxic to people. Urgent ‒ and expensive ‒ action was needed.
In order to progress assessing the significant costs incurred in remediating the pipeline leakage Gallagher firstly approached the insurer to discuss whether the intention of the policy could be interpreted to include this type of expense.
These discussions included closely analysing the terms of the policy and how the client’s incident matched the requirements. The underwriters agreed with our views and calculation of the costs moved forward.
The Gallagher difference
Our relationship with the insurers, along with the Gallagher claims advocate’s knowledge of specialist insurance products ensured that our client’s claim was accepted by the underwriters, resulting a faster, frictionless settlement time.
We pride ourselves on our claims service
Part of our commitment to building business confidence is fighting for what’s right, and supporting clients through claims is one of our key pillars of business practice.
Gallagher claims expertise and 17 case studies are outlined in the Gallagher Advocacy in Action report where you can read more about this oil production claim in detail and other examples from professional indemnity to corporate travel.
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective.