The hybrid pollution product within Mosaic’s environmental liability team combines elements of contractors pollution liability and control of well cover.
Mosaic Insurance has unveiled an innovative environmental insurance solution designed to help companies remediate abandoned and orphaned oil and gas wells across North America, addressing a significant climate risk while supporting the energy transition.
The hybrid pollution product combines elements of contractors pollution liability (CPL) and control of well (COW) cover to provide more comprehensive protection for firms plugging disused wells.
The new offering is designed to close a critical gap in existing insurance cover for projects spurred by government incentives in the US and Canada.
Karen Reilly, Mosaic’s head of Americas, environmental liability, said: “Mosaic is proud to be at the forefront of supporting companies tackling this urgent challenge that enables real progress on climate mitigation.
“Our innovative, responsive coverage brings certainty to the many liabilities involved. By doing so, Mosaic is helping unlock the growth of projects that directly reduce greenhouse gas emissions—a win for our partners, our industry, and the planet.”
An estimated two million inactive, unplugged oil and gas wells are scattered across the US, according to the US Environmental Protection Agency, with many leaking toxic chemicals and methane.
The US federal Orphaned Well Program, launched under the Bipartisan Infrastructure Law, is providing $4.7 billion to help cap and reclaim these sites. Canada has also introduced government funding for similar clean-up efforts.
Max Horn (pictured), Mosaic’s environmental liability specialist, led development of the product after identifying an unmet need in the market.
He said: “We saw an opportunity to bridge the divide between traditional Contractors Pollution Liability (CPL) and standard Control of Well (COW) policies.
While CPL typically covers pollution events and COW covers well control and redrill costs, neither fully addressed the needs of orphaned well remediation projects. Mosaic created a tailored solution that combines the two, offering more comprehensive protection for this evolving risk.”
Mosaic has entered into an exclusive distribution agreement with Aon for the product, which is aimed at project owners, well-plugging contractors, and buyers of carbon credits generated by plugging operations.
Horn added: “Through well-designed policies to cover these potentially complex challenges, insurers can play a significant role in advancing climate solutions.”
Environmental liability is one of seven specialty lines at Mosaic, alongside cyber, transactional liability, political risk, political violence, professional liability and financial institutions. The company’s team of product specialists is based across the US, Canada and Bermuda.
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