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A small Oklahoma operator begins plugging three aging shut-in wells to reduce compliance costs. Two days in, deteriorated casing on a 1960s-era wellbore fails, allowing hydrocarbons to migrate to the surface. After a series of containment and remediation actions, costs quickly reach $1.4 million. His General Liability policy excludes well control events, and he hasn’t carried Control of Well coverage because he assumed shut-in wells carried no real risk—an assumption that cost him dearly.
This kind of scenario plays out across the industry regularly, and the root cause is almost always the same: misconceptions about Control of Well (COW) insurance that leave operators dangerously uninsured before an incident ever occurs. For brokers in the energy space, navigating those misconceptions could be the difference between a client who recovers from a well control event and one who doesn’t.
Let’s start with the basics. Control of Well insurance, also called Well Control or Operator’s Extra Expense (OEE) coverage, is a specialized policy designed specifically for well operators and contractors. It addresses costs associated with well control incidents that standard policies simply weren’t built to cover. Those costs might include:
For a closer look at COW coverage, check out our guide, Control of Well Insurance: What It Is and Why It Matters.
Even if your well-related accounts are familiar with COW insurance, they may choose not to carry it. But the question is why? There’s a good chance they don’t have all the right information. Let’s look at some of the most common misconceptions about Control of Well insurance and replace them with the facts.
Myth 1 — “My wells are already drilled. I don’t need this coverage”
Myth 2 — “My General Liability (GL) and/or Property policy will cover it”
Myth 3 — “If it’s not a major blowout, it won’t be that costly.”
Myth 4 — “Control of Well insurance is too expensive.”
Myth 5 — “We have strong safety practices. COW isn’t necessary.”
Myth 6 — “Our Environmental or Pollution policies will cover any events.”
Myth 7 — “COW is only relevant for drilling contractors.”
Myth 8 — “We post state bonds. That’s enough protection.”
Myth 9 — “I only have a non-operating interest in the well. The operator’s policy will cover me.”
Myth 10 — “If I’ve seen one COW policy, I’ve seen them all.”
This myth gets tricky, because the fundamental nature of it is tied to a larger myth, which is that well control incidents are only common during the drilling portion of a well’s lifecycle. If the latter were true, the logical conclusion would be that if everything is okay now, there’s no need for coverage in the future. The problem is that it treats past performance as a guarantee of future safety, and it isn’t.
Data from an independent analysis of the IOGP Well Control Incident database performed in 2021 shows that nearly a third of the documented incidents analyzed occurred during non-drilling operations, including completions, interventions, cementing, and abandonment activities—confirming that well control risk extends to all aspects of a well’s operation. Stable production does not promise that issues won’t occur down the road. Simply put, if you have a well in the ground, you have a COW exposure.
BROKER TAKEAWAY: Ask your client: “Are you completely finished touching that well forever?” If the answer involves workovers, recompletions, interventions, plug and abandonment, or even routine maintenance, the exposure is still alive. If the well has a future, so does the risk.
This is arguably the most dangerous myth in the group because it sounds so reasonable. However, many GL and Property policies explicitly exclude well control expenses, blowout costs, and equipment under an insured’s care, custody, or control. In some cases, the exclusions are broad enough to knock out pollution remediation arising from a well incident.
“I thought my GL covered it” is a phrase brokers hear all too often after a well control claim goes uncovered. That’s why having the facts matters. Control of Well insurance was built specifically to fill the gaps GL and Property policies leave behind.
BROKER TAKEAWAY: Pull the GL policy exclusions during your next renewal and walk through them together. Seeing the language in black and white often proves helpful in explaining the differences in coverage types.
Ask most people what they picture when you say, “well control incident,” and you’ll get something from a headline or a movie. Events like Deepwater Horizon loom large—and they should. But the well control events that threaten small and midsize operators rarely make the news. They just quietly accrue costs and often end companies.
Even routine events like a failed workover, an unexpected kick, or a casing integrity failure, can generate costs well into seven figures when control operations, remediation, and redrilling are accounted for. For an operator running on tight margins, a $2 million loss can be as devastating as $200 million is to a major company. The scale changes. The impact doesn’t.
BROKER TAKEAWAY: Ask your client: “If a workover went wrong tomorrow and cost $2 million to fix, could your business absorb that without insurance?” The answer usually speaks to the value of COW better than any sales pitch.
This objection usually surfaces after an insured hears a premium figure tied to traditional underwriting benchmarks which price policies at three times the Authorization for Expenditure (AFE). And while the focus shouldn’t be on the cost of COW insurance, but rather the cost of going without it, traditional pricing models can still produce daunting numbers for many small to midsize operators.
Kinsale’s Energy Division, however, specializes in small to midsize operations. We have flexibility to write below the 3x AFE threshold and tailor coverage to each client’s actual risk profile. Our underwriters understand a small operator with three producing wells and a clean record has a different risk profile than a large operator running active drilling programs.
BROKER TAKEAWAY: Work with your carrier on a quote tailored to the client’s actual exposure. A customized approach often reveals that meaningful coverage is far more affordable than assumed.
Nobody disputes the value of safety. But strong training, rigorous procedures, and thorough pre-job planning only reduce the frequency of incidents, they don’t eliminate the possibility. Unpredictable subsurface conditions, mechanical failures, and human error remain even in the best-run operations.
Safety programs and insurance are not competing priorities. Safety prevents incidents. Insurance protects the business when prevention isn’t enough.
BROKER TAKEAWAY: Refuting this myth is as simple as reminding a client that no matter how good a safety plan is, it won’t cover the cost of remediation should an event occur.
Pollution Liability plays an important role in an oil and gas risk program, but it does not replace Control of Well coverage. Likewise, Environmental policies may respond to pollution, yet like many GL and Property policies, they exclude critical well control costs. COW insurance is built to address those operational and cleanup expenses from the start.
BROKER TAKEAWAY: Review the Pollution policy exclusions while having the COW conversation. Showing clients where environmental coverage stops and COW begins is one of the clearest ways to demonstrate the gap.
Drilling contractors have obvious COW exposure, but they’re far from the only ones. A broad range of stakeholders across the well lifecycle face genuine well control risk:
BROKER TAKEAWAY: Map out all the parties involved in your client’s operations. Each one likely has a COW exposure and may not know it.
State bonds ensure operators have financial accountability to regulators for plugging and abandonment obligations. In other words, they function as a compliance tool, not a complete risk transfer tool. State bonds serve mainly to protect the state’s interest. They are fixed in amount (often as low as $10,000–$25,000 per well) and were not necessarily designed to reimburse well control costs completely. A $25,000 bond alone offers little protection against a $2 million remediation effort.
BROKER TAKEAWAY: This myth is especially common among smaller independents who interact more with state regulators than risk managers. Separating “compliance” from “coverage” is often the key to the conversation.
An operator’s Control of Well policy may extend coverage to non-operating interest owners, but that protection is not automatic or unlimited. Policy limits may be shared among all interest holders and can be exhausted in a significant loss. Coverage may also be subject to exclusions, percentage limitations, or policy conditions outside the non-operator’s control.
Although non-operating interest owners are not responsible for day-to-day operations, they remain financially responsible for their proportionate share of a well—including losses. Securing dedicated coverage helps ensure protection regardless of how the operator’s policy responds.
BROKER TAKEAWAY: When placing coverage for any party in the well lifecycle, ask specifically about their COW exposure and whether they’re relying on someone else’s policy.
It’s true that many Control of Well policies share a similar framework and offer comparable components. What sets them apart is the carrier behind them. The ability to customize limits, tailor enhancements, and respond quickly can directly impact coverage, cost, and the insured’s experience.
Kinsale Energy Divisions focuses on flexibility and speed—and as a result, creates more competitive pricing. Coverage can be structured around the specific risk, including optional enhancements such as:
Our ability to write under the 3x AFE threshold also allows for more precise underwriting, which can translate into meaningful pricing advantages.
BROKER TAKEAWAY: A side-by-side comparison often shows that the real difference is not the form itself, but the flexibility and speed of the carrier backing it.
Control of Well insurance shouldn’t be thought of as niche add-on coverage. It’s a strategic risk transfer tool that protects operators, contractors, and service companies from financial exposures that standard policies don’t address.
Far from a sales pitch, the myth-to-fact conversation is a service to accounts and could be the difference between a quick recovery or potentially devastating losses.
At Kinsale, our Energy team understands the unique exposures faced by oil and gas professionals at every stage of the well lifecycle. Whether your client operates a single well or a large portfolio, we can build a COW solution tailored to their risk profile, operational footprint, and budget.
To explore Kinsale’s COW options or download marketing materials like our Control of Well Quick Guide, visit kinsaleins.com/COW.
Or, if you’re ready for a quote, we’re ready for you! Email account details and submission materials to eg@kinsaleins.com. We’ll get started on your quote right away.
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