Mosaic Insurance has introduced a new environmental liability insurance product designed for companies involved in the remediation of abandoned and orphaned oil and gas wells across North America.
The coverage was developed in response to increasing activity in the well-plugging sector, supported by public funding in both Canada and the US. The new policy aims to address insurance gaps tied to environmental and operational risks associated with these projects.
“This would allow Mosaic to support companies working on projects that contribute to climate mitigation efforts,” said Karen Reilly, Mosaic’s head of Americas, environmental liability. “Our coverage is designed to address the specific liabilities involved in this type of work.”
The US Environmental Protection Agency estimates there are roughly two million inactive, unplugged wells across various states. These sites can release methane and other harmful substances, with associated risks to both the environment and public health.
In 2021, the US federal government launched the Orphaned Well Program under the Bipartisan Infrastructure Law, allocating US$4.7 billion for plugging and reclamation efforts. Similar initiatives have been introduced by provincial and federal governments in Canada.
Mosaic environmental specialist Max Horn (pictured above) led the development of the policy, which combines elements of Contractors Pollution Liability (CPL) and Control of Well (COW) coverage, two products that traditionally do not fully address the exposures linked to orphaned well remediation projects.
“We saw an opportunity to offer a solution that combines elements of both CPL and COW into a more tailored product,” said Horn, who worked with global broker Aon and project development firm Tradewater in creating the offering.
Mosaic and Aon have entered into an exclusive distribution agreement for the new product, which will be marketed to well owners, plugging contractors and buyers of carbon credits tied to these projects.
Horn is also involved in developing coverage for other energy transition initiatives, including carbon capture and sequestration (CCS), another emerging area with government incentives and evolving risk profiles.
“By offering policies that respond to these types of projects, insurers can help support the broader shift toward climate-related infrastructure work,” Horn said.
Aside from environmental liability, Mosaic said the company also writes cyber, transactional liability, political risk, political violence, professional liability and financial institutions. Mosaic’s operations in the Americas include offices in several US cities, as well as in Toronto and Bermuda.
