Oil insurance is a sector which covers a wide range of activities pertaining to the oil and energy industries.

Some insurance companies specialize only in petroleum companies’ insurance management, whereas in some others, the oil industry is only a portion of their clients’ portfolios. Specialized oil insurance companies however have access to a bigger market share and thus may provide numerous and advanced insurance programs which might not be available at a general insurance provider.

Cargo insurance is usually the most sought after kind of insurance for the oil sector. Such kinds of insurance premiums cover the vehicle and contents of tanks or cargo. Premiums can also cover items like third party pollution on a sudden or accidental basis, as well as spill response, environmental response and others relative claims. Under some premiums, driver training can also be secured, and spill response courses are taught.

Such insurance transactions are mostly done in the traditional underwriting methods. However, with the event of the Internet, some oil insurance companies have gone online and provide web sites and portals where insurance transactions and claims can be handled 24 hours a day, 365 days a year, from all over the world. These sites are however underwritten by specialized insurance firms. It in turn drastically reduces costs and response time between claims and settlement, since everything is handled in a no-paper, electronically-secure environment. Certificates and other necessary documents are available at a fraction of the time they would have taken in the traditional route.

Oil insurance can also pertain to insuring of oil rigs and wells, as well as the whole oil drilling business. Rigs and wells insurance holds a market cap value for insurance. However, this aspect of the oil insurance industry has undergone some changes and alterations after the event of hurricanes Katrina and Rita a few years back. Recent amendments in the guidelines of the National Insurance Commission (NAICOM) have also altered the set-up for oil industry insurance, especially where the syndication of insurance in overseas countries is concerned. This was done in an effort to boost indigenous participation in the gas and oil industry.