April 10, 2014

The Cost of Iron

When most people think of property and casualty insurance, they sometimes think of a direct one-to-one reimbursement in the event of a claim; if a $100 part breaks, the policyholder will receive a check for $100. It’s a pretty straightforward approach, but in many cases it doesn’t work in the real world for companies in the oil and gas industry. That’s because the cost of equipment can actually go up – not down – during the life of the policy, meaning that it could cost more than the original purchase price to replace a critical piece of gear. As a result, companies can actually lose money, even if they have taken all the right steps to minimize their risk.

“We created the Cost of Iron Endorsement to help fill in this critical gap,” says Carol Tyrrell, the program manager who oversees ProSight Specialty Insurance’s (“ProSight”) Oil and Gas program. “When industry demands rise, the cost of gear can rise, which makes replacement more expensive. We are the only insurance carrier that offers up to 150% of the declared value of equipment if it is stolen or destroyed. This is a major innovation because it recognizes – for the first time – that oil and gas companies need to have the financial ability to replace gear and keep working rather than have to limit their operations because they can’t afford to replace damaged or missing equipment.”

ProSight Specialty Insurance focuses on opportunities where we have differentiated expertise and partners exclusively with specialists who have a deep understanding of their customers. Our team understands the specific challenges that oil and gas companies face, and we created the Cost of Iron Endorsement to fill a critical need in this industry.

For more information about ProSight’s products for the oil and gas industry, please contact Program Manager Carol Tyrrell at ctyrrell@prosightspecialty.com or by phone at 818 230 8230.