Workers’ Comp Insurance for Oil and Gas Industry

Workers’ comp insurance for oil and gas is essential for protecting both businesses and their employees. The oil and gas industry is one of the most hazardous sectors, with workers often exposed to dangerous conditions, heavy machinery, and physically demanding tasks. Without proper workers’ compensation insurance, companies in this industry face significant financial risks if an employee gets injured on the job.

Every state has its own workers’ compensation requirements, and navigating these regulations can be complicated—especially for companies operating across state lines. If you’re an oil and gas company looking to secure affordable and flexible workers’ comp coverage, NPN Brokers can help. Give us a call at (561) 990-3022 to get a quote within minutes and coverage in as little as 24 hours.

The Importance of Workers’ Comp Insurance in the Oil and Gas Industry

The oil and gas industry involves a wide range of job roles—from drilling and refining to pipeline construction and maintenance. Each role comes with its own set of risks, making workers’ comp insurance for companies in the oil and gas industry not just a legal requirement but a practical necessity.

Protecting Employees and Businesses

Workers’ comp insurance covers medical expenses, lost wages, and rehabilitation costs for employees injured on the job. It also provides death benefits to families if a workplace injury leads to a fatality. For oil and gas companies, this coverage protects the business from costly lawsuits and ensures injured employees receive the care they need.

Legal Requirements Vary by State

Workers’ compensation requirements differ depending on the state in which a company operates. For example, Texas does not mandate private employers to carry workers’ comp, but oil and gas companies that opt out expose themselves to significant liability if an employee gets injured. In Oklahoma, workers’ comp is required for all employers, including those in the oil and gas industry, regardless of company size. North Dakota has a monopolistic workers’ compensation system, meaning coverage must be obtained through the state fund. In California, any business with one or more employees—including oil and gas contractors—must carry workers’ comp insurance.

For oil and gas companies working across multiple states, ensuring compliance with each state’s workers’ comp laws can be challenging. NPN Brokers simplifies this process by finding coverage that meets your specific needs, no matter where your business operates.

Understanding the Risks

The oil and gas industry is known for its high-risk work environments. From drilling sites to refineries, employees face daily hazards that make workers’ compensation insurance essential.

Explosions and fires are some of the most significant risks in the oil and gas sector. The presence of flammable gases and liquids creates an environment where a single spark can lead to catastrophic results. Workers near drilling sites, storage tanks, and pipelines are especially vulnerable to such incidents.

Falls from heights are another common hazard. Many oil and gas operations involve work on elevated platforms, derricks, or scaffolding. Without proper fall protection, workers can suffer severe injuries from even relatively short falls. These accidents can result in broken bones, head trauma, or long-term disabilities.

Machinery accidents are frequent on oil and gas sites. Workers operate heavy equipment, such as drilling rigs, cranes, and trucks, which can cause serious injuries if mishandled or if equipment malfunctions. Even routine tasks can become dangerous without strict adherence to safety protocols.

Exposure to toxic chemicals is another significant concern. Workers often encounter hazardous substances like hydrogen sulfide and drilling fluids. Prolonged exposure can lead to respiratory issues, skin conditions, or more severe health problems over time.

Workers’ Compensation Class Codes for Oil and Gas Jobs

Workers’ comp insurance for oil and gas companies is categorized by job types, each with its own classification code. These codes determine premium rates based on the risk associated with each role.

• Code 1320 – Oil or Gas Lease Work (Non-Drilling): This code applies to workers involved in maintaining and servicing oil or gas leases, excluding drilling operations. It includes activities such as site preparation, equipment maintenance, and general upkeep of the lease area. Since these tasks still involve significant risk, proper classification ensures adequate coverage.
• Code 6233 – Oil or Gas Pipeline Construction: This code covers workers involved in the installation and maintenance of pipelines. The work often involves trenching, welding, and pipeline inspection, all of which come with significant risk. Accurate classification under this code ensures that injuries sustained during pipeline work are properly covered.
• Code 6217 – Excavation (Pipeline Construction): This classification applies to trenching and excavation work specifically related to pipeline installation. Excavation work carries a high risk of cave-ins, equipment accidents, and exposure to underground utilities, making appropriate coverage essential.
• Code 8350 – Gasoline Stations: This code applies to employees working at fueling stations owned by oil and gas companies. While these workers may not be directly involved in drilling or pipeline work, they still face risks from flammable materials, vehicle traffic, and lifting heavy objects.
• Code 5183 – Plumbing and Pipefitting: Workers handling piping systems in refineries and industrial plants fall under this code. These employees often work in confined spaces and around high-pressure systems, increasing the risk of injury. Proper classification ensures that medical expenses and lost wages are covered in the event of an accident.

Accurate classification is essential to avoid overpaying for coverage or facing penalties for underreporting risk. NPN Brokers works with oil and gas companies to ensure proper classification and affordable premiums.

How State Regulations Impact Workers’ Comp for Oil and Gas Companies

Workers’ comp requirements can vary widely depending on the state. For oil and gas companies operating across state lines, understanding these variations is crucial.

Texas is unique in that it does not require private employers to carry workers’ comp insurance. However, opting out leaves companies vulnerable to costly lawsuits if an employee gets injured. In contrast, Oklahoma mandates coverage for all employers, including independent contractors working in the oil and gas industry. New Mexico requires workers’ comp for all employers with three or more employees, while Louisiana extends this requirement to all employees, including part-time and seasonal workers.

Failing to comply with state-specific requirements can lead to hefty fines, business shutdowns, and legal liabilities. NPN Brokers ensures your company remains compliant, no matter where you operate.

What Happens if an Oil and Gas Company Lacks Workers’ Comp Insurance?

Operating without workers’ comp insurance exposes oil and gas companies to significant risks. Non-compliance with state regulations can result in substantial fines, business shutdowns, and even criminal charges in some states. In addition, injured workers can sue the company for medical expenses, lost wages, and pain and suffering, leading to costly settlements.

The financial burden of covering medical bills out of pocket can devastate a company’s finances. Without proper coverage, a single serious injury can lead to bankruptcy. Beyond financial risks, failing to protect employees can harm a company’s reputation within the industry, making it harder to attract skilled workers and secure contracts.

Avoid these risks by securing proper coverage. NPN Brokers can help you find affordable, state-compliant workers’ comp insurance tailored to your business needs.

How NPN Brokers Simplifies Workers’ Comp for Oil and Gas Companies

Finding the right workers’ comp insurance for companies in the oil and gas industry can be complicated, but NPN Brokers makes the process simple and efficient.

NPN Brokers offers quick quotes, allowing companies to receive an estimate within minutes. Once a policy is selected, coverage can begin within 24 hours, ensuring no gaps in protection. There are no long-term contracts or hefty deposits, giving businesses the flexibility to adjust coverage as their workforce changes. With multi-state coverage options, NPN Brokers ensures that your company remains compliant, no matter where your operations are located.

If you’re ready to secure reliable workers’ comp insurance for your oil and gas business, contact NPN Brokers today. Call us at (561) 990-3022 or fill out our online quote request form to get started.