COVID-19 has created difficulties for many industries. Oil and gas are not immune.
Facing shutdowns and supply issues, oil and gas companies are experiencing decreased demand, sinking prices, and reduced profits.
Some companies have shut down production entirely, creating additional problems as coverage requirements and expenses remain even when cash flow has slowed or stopped. As a result, some companies have been forced to lay off workers, scale down production, or get out of the business entirely.
But as some doors close, others open. These recently laid-off workers have all of the skills needed to provide incredible value for companies still in the industry as well as those in adjacent industries.
Working as consultants or W2 employees, many have been able to return to work in at least a limited capacity. Others are taking advantage of opportunities opening up in the market, starting new ventures to compete against larger, established operations.
These smaller operations have the advantage of being more nimble, better able to adapt to shifts and changes in the tumultuous market. Consequently, the challenge emerges when considering coverage needs.
The same coverage requirements that are imposed on large companies must also be met by these new ventures. Coverage levels and excess lines are required both by regulations and the expectations of customers.
Meeting these insurance needs, while expensive, is still possible for larger firms that make millions each day from production.
For smaller operations this can become a burdensome expense. Maintaining cash flow is one of the greatest hurdles for new businesses, and the oil and gas industry is certainly not a cheap buy-in.
To get access to the coverage they need, smaller ventures require a unique insurance solution that takes into account their needs and capacity.
That’s where we come in.
How MJ Kelly serves the oil and gas industry:
When the conditions in the industry shift, your insurance solution needs to compensate.
At MJ Kelly, we work directly with our oil and gas clients to find specialty solutions to market challenges caused by recent price drops and COVID-19.
If you are an established business, we have options for alternative policies to reduce insurance expenses when revenue stops or slows.
Namely, we recently worked with a large operation that had been forced to shut down production. They needed to keep their coverage and excess lines to remain eligible for larger contracts, but the revenue shortage made their existing policy untenable.
Our team was able to replace their policy with one that had sufficient coverage to fit their needs but was feasible from a revenue perspective. This enabled them to keep the doors open and ride out their difficult season.
In another case, one of our agents worked with a contractor who performed saltwater injection repair services. The contractor needed coverage to work, but the policy quotes he had received to that point were far outside of what he could afford as a one-man operation.
We were able to work with our markets to find a policy that fit his needs at a reasonable price, enabling him to continue to operate without a strain on cash flow.
Whether you are a full-fledged operation or a newly established contractor, MJ Kelly has a policy solution for your oil and gas exposure. Your needs are unique, so we custom fit policies to meet those needs.
Whatever the terrain, we’ll pave a way.