Willis offers coverage for offshore decommissioning risks

Willis Energy has introduced insurance facility to cover the new risks associated with decommissioning and dismantling offshore oil and gas platforms, a need expected to increase as installations reach the end of their productive lives.

“Major platform operators and leading insurance underwriters believe that the unique exposures arising out of these specialized projects require a bespoke insurance policy,” Chris Dear, managing director of Willis Energy, a division of Willis Group Holdings plc, says in a statement.

In the years ahead, a significant number of offshore oil and gas platforms will be decommissioned, notes the statement from the global insurance broker. In the North Sea alone, it is estimated total costs of offshore decommissioning could reach £30 billion over the next few decades.

To help clients better manage risk, Willis has launched an Offshore Dismantling & Removal Insurance Facility, in conjunction with a group of marine and energy insurers committed to underwriting this class of business. The policy addresses specific decommissioning risks, including those related to contractual liability exposures, seepage, pollution and contamination.

“Dismantling and removing large offshore platforms, particularly those located in inhospitable environments, is a serious operational and logistical challenge. But increasingly legislation compels companies to do this,” Dear reports.

Willis has extended standard removal of wreck cover to also address the high profile “heavy lifting” risks unique to decommissioning projects, and developed a risk matrix to help clients assess their exposures. Additionally, the policy provides platform operators with extra cost and expense cover and, if required, physical loss and damage cover.