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 addresses insurance gaps tied to environmental and operational risks associated with these projects.
The new policy 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. According to Max Horn, Mosaic environmental specialist who led the development of the policy, “We saw an opportunity to offer a solution that combines elements of both CPL and COW into a more tailored product.”
The US Environmental Protection Agency estimates there are roughly two million inactive, unplugged wells across various states, which can release methane and other harmful substances, posing risks to both the environment and public health. In response to this issue, the US federal government launched the Orphaned Well Program under the Bipartisan Infrastructure Law in 2021, allocating US$4.7 billion for plugging and reclamation efforts. Similar initiatives have been introduced by provincial and federal governments in Canada.
Mosaic and global broker 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. Karen Reilly, Mosaic’s head of Americas, environmental liability, stated that the coverage will allow Mosaic to support companies working on projects that contribute to climate mitigation efforts.
The development of this insurance product is part of Mosaic’s broader involvement in energy transition initiatives. Max Horn is also working on coverage for other emerging areas, including carbon capture and sequestration (CCS), which has government incentives and evolving risk profiles. As Horn noted, “By offering policies that respond to these types of projects, insurers can help support the broader shift toward climate-related infrastructure work.”
