Marcellus Shale Insurance Issues
The Marcellus formation has caused an increase in both potential revenue sources and serious insurance issues for local Pittsburgh, PA homeowners, farm owners and businesses.
The additional hazards associated with gas well exploration and the use of hydro-fracking techniques used in gas well, production and the resultant increase in infrastructure such as well pads, pipelines and roads to service the wells have increased the potential for the frequency and size of liability losses to property owners within the region.
Landowners in the area have experienced land ownership and purchasing issues regarding land that is currently within, adjacent to or simply near a well or proposed well site. Lenders require the borrower to obtain and maintain insurance to protect the lenders’ interest in the event of a loss on the property. If insurance can not be obtained lender’s may claim the loan is in default or refuse new loan applications.
Potential buyers of property that have no well equipment, but are simply adjacent or near a site may have the same difficulties as existing landowners in obtaining insurance or a loan especially if the previous owner has signed a lease conveying mineral rights to a gas company.
Insurance Coverages and Gas Leases
Signing a lease with a gas company can cause a person’s existing homeowner insurance to be non-renewed, cancelled, or subject to significant premium increases. Even home or landowners that have not signed leases may be subject to the same insurance consequences, due to their proximity to the drilling site and current drilling technologies.
Other problems may develop for a property owner with a gas lease such as the “nuisance” lawsuits” that arise from neighbors, liability for accidents arising from the aforementioned well pads, pipeline and service roads and pollution claims from the drilling affecting water wells in the area.
Some homeowner policies grant liability coverage for “limited business pursuits” or coverage for ‘vacant land’. Each insurance company has their own interpretation as to whether the income derived from signing a gas lease is a “limited business pursuit” or can be a primary business pursuit of the insured and hence, no coverage would exist under the homeowner policy.
Natural Gas Insurance and Pollution Insurance Experts
Landowners in the region have unique insurance exposures, and the Driscoll Insurance and Financial Services staff can help address those exposures. Driscoll can explain the needs and issues regarding Marcellus shale insurance and Utica Shale insurance coverage, as well as other issues regarding natural gas insurance exposures and coverage issues such as the need for pollution insurance, for damages to underground water wells and farmland.
The natural gas insurance experts at Driscoll can devise cost effective solutions for those landowners with Marcellus shale insurance needs and Utica shale insurance issues as well. The Driscoll staff will can assist with advising a landowner regarding the insurance implications regarding the signing of a lease or even if the landowner is not aware of any mineral rights issues regarding the insured’s property.
Driscoll Insurance and Financial Services is a full lines insurance service company and can provide innovative and cost effective insurance solutions for Homeowners, Farm owners and Business owners as well. Driscoll partners with companies such as Travelers, Progressive, Encompass, Progressive and Hartford to provide homeowners, automobile, life and health insurance as well commercial property and liability insurance, pollution insurance and worker’s compensation programs to fully cover individuals as well as any business.