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How To Reduce Fleet Insurance Rates For Oil And Gas Companies Brian Dziuk | Jan 22, 2019 10:14:00 AM

The oil and gas industry is an expensive space due to the amount of insurance coverage needed. The operational practices performed for such tasks like offshore drilling and hydraulic fracking create environmental and safety risks that are exclusive to the oil and gas industry, which forces companies to apply for specialized insurance policies.

Oil and gas fleet insurance rates are among the highest costs within the industry. The fleet vehicles, equipment, and tools needed in the field are expensive to repair and replace, and can devastate a business's revenue if left out of commission for too long. However, some insurance companies will offer lower insurance premiums to oil and gas companies who demonstrate their commitment to safer working conditions.

Oil and gas companies can use fleet management software in conjunction with fleet tracking devices to schedule regular maintenance and monitor equipment performance to identify areas that may need improvement.

Increase Workplace Safety Measures

The oil and gas industry is considered to be one of the most dangerous work sectors. The U.S. Bureau of Labor Statistics’ (BLS’) National Census Report for Fatal Occupational Injuries confirmed that in 2017, worker fatalities increased by 26% in the private mining, quarry, and oil and gas extraction industry. More than 70% of these fatalities affected workers in the oil and gas industry.

Oil and gas fleet equipment is heavy, complex, and extremely difficult to operate. It takes months of training before workers gain a full understanding of the functions of production and drilling equipment. Improperly-trained employees run the risk of serious accidents that can be detrimental to the environment and could create dangerous working conditions.

Some of the most common accidents for oil and companies include:

  • Oil spills;
  • Burst oil or gas pipes;
  • Explosions and fires;
  • Electrocution; and
  • Exposure to harsh and deadly chemicals.

By following proper safety guidelines— such as having safety structures, safeguards to prevent falls, and wearing clothes that won’t get caught in the gears of the fleet equipment— managers can increase worker safety and mitigate injury risks. The fewer accident claims oil and gas companies have to report, the greater the possibility of asking for lower fleet insurance rates.

Protect Fleet Vehicle with Anti-Theft Prevention

The annual cost of heavy construction fleet equipment theft ranges from $300 to $1 billion, according to the National Insurance Crime Bureau (NICB). A 2017 news report mentions the arrest of two thieves in Colorado who managed to steal more than $13,000 worth of oil and gas equipment from various sites.

Oil and gas equipment is expensive to replace. The right insurance policy may provide replacement costs, but the resulting downtime while certain pieces of fleet equipment are out of commission can devastate a business. Anti-theft prevention is necessary if oil and gas companies desire the possibility of lower fleet insurance rates for being a low-risk client. Installing GPS tracking devices allows oil and gas fleet managers to remotely monitor the location of the oil and gas equipment to avoid replacement costs.

Rastrac’s fleet vehicle tracking software comes with a geofencing tool that allows you to outline virtual borders into a variety of standard or custom figurations. You will receive an alert via text or email if a tagged fleet equipment piece enters or leaves the set boundaries. Some Rastrac tracking devices also feature a starter disabler function that prevents fleet vehicles from operating during set times.If a vehicle is already moving, once it is turned off, the disabler function will not let it start again.

Track Fleet Maintenance to Avoid Costly Repairs

Oil and gas fleet equipment always need proper maintenance. Drilling and fracking are extremely sensitive operations that could quickly lead to problems and cause the fleet equipment stops working efficiently. Parts requiring maintenance that are not cared for become large expenses for oil and gas companies due to the unscheduled repair services and downtime in daily operations.

A way to avoid sudden costly repairs is to connect a fleet tracking device to the onboard diagnostic system to collect data on the performance of the oil and gas fleet equipment. Fleet managers can monitor the diagnostics directly with their fleet management software and set up notification alerts as reminders for the next maintenance scheduling. With the right oil and gas fleet tracking solution, companies can lower fleet insurance rates by implementing preventative maintenance strategies and accurately tracking:

  • Activation times and total time active;
  • Engine RPM’s and temperature; and
  • Flow rates.

Keep Claims to a Minimum with Safe Driving Habits

Transporting petroleum products of any kind is dangerous. It can be even riskier by having a driver with unsafe driving habits behind the wheel. An accident on the road could lead to a number of fatalities and cost oil and gas companies hundreds of thousands of dollars in repair damages — not to mention potential lawsuits.

Fleets with fewer accident claims may be eligible for lower insurance premiums and prevent substantial hikes to their fleet insurance rates. By using fleet management software, oil and gas companies can monitor the driving behaviors of their employees using live tracking to collect information on:

  • Hard braking habits;
  • Acceleration and deceleration rates;
  • Driving speeds;
  • Idle times; and
  • When drivers arrive or depart from certain locations.

Bad driving habits create significant wear and tear to fleet vehicles, which can cause breakdowns or accidents that could have otherwise been avoided. Oil and gas companies using fleet tracking and monitoring can correct these issues and ensure their drivers comply with safer driving habits.

The oil and gas industry falls under intense scrutiny for worksite accidents and other unsafe working conditions that leave employees and the environment at risk. This can prevent oil and gas businesses from receiving cheaper fleet insurance rates from insurance companies and forcing them to purchase more expensive fleet insurance policies.

With Rastrac GPS fleet management solutions and live fleet tracking for the oil and gas industry, fleet managers can monitor critical aspects of oil and gas operations to ensure fleet vehicles and other essential equipment are working safely and efficiently.

To learn more about how fleet management can help your oil and gas business, check out our oil and gas feature sheet by clicking on the image below!

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