American Oil and Gas Reporter - December 2017 - 76

in-conditions basis if so desired by the operator. Another
significant issue is limit adequacy for the insured's operations,
especially given that liability limits are subject to annual
aggregates that can be eroded by large losses.
Where coverage is inadequate or where a gray area exists,
there are often other types of policies that can respond. For example, where an operator has potential exposure for a large
property loss-such as a drilling rig or frac spread-because it
was not able to negotiate a favorable contract, it can shift that
exposure to care, custody & control (CCC) coverage under a
control of well policy. CCC wordings vary by carrier and must
be reviewed carefully. Also, operators often have direct contractual
responsibility for in-hole tools and coverage is limited under a
CCC policy, although broader coverage is available under
specialty in-hole tool programs.
U.S. Occupational Safety & Health Administration data
Q:
show that vehicle crashes are the leading cause of workrelated fatalities in the upstream industry. According to one
study, small oil and gas companies are at the greatest risk of vehicle-related incidents. What can operators do to reduce the risk
of vehicle accidents on the job? What advice do you have for encouraging safety-conscious driving practices and implementing
safe driving programs?
PLUMER: Thanks to the cultural phenomenon we live in
created by technology, drivers are faced with many distractions,
with cell phones and cognitive distractions being the two biggest
obstacles. An ideal approach to reducing auto accidents on the
job is to make sure all employees are trained properly in the
areas of defensive, distracted and alert driving. These topics
should be an integral part of the company's safety manual and
taught or refreshed on a yearly basis through in-house training
or a third-party vendor.
Another key component of a great fleet program is having a
distraction-free driving policy each driver must sign that
eliminates using cell phones while driving. A successful program
not only will run a yearly motor vehicle record report on each
driver, but will run as many as four MVRs a year to ensure
drivers are maintaining safe records while away from work.
While implementing safe driving programs is integral,
creating a safety culture by which a company lives and exemplifies
from the top down is the best way to ensure safe practices are
followed throughout an organization. Best-in-class companies
make safety a priority at all times. Safe driving practices should
adhere to these guidelines:
* Focus on driving 100 percent of the time, with no multitasking while driving.
* Drive defensively, being aware of and alert to what other
drivers are doing.
* Plan ahead by fixing mirrors, seats and radios before
driving.
* Practice safety, and always wear safety restraints.
What specific policy elements should be contained in an
Q:
effective fleet vehicle insurance program? Are there any
optional vehicle coverages you recommend companies consider
adding to their policies?
PLUMER: This response will focus primarily on the liability
section of the business auto policy for which a number of important endorsements are available. Regarding pollution liability,
form MCS-90 deals with the financial responsibility requirements
imposed by the Motor Carrier Act of 1980. Most truckers
subject to the act comply with these requirements by using
federally mandated form MCS-90, which amends the auto
policy to assure compliance as a motor carrier of property.
76 THE AMERICAN OIL & GAS REPORTER

With this endorsement, the policy agrees to pay, within the
designated limits of liability, any final judgment recovered
against the insured for public liability resulting from negligence
in the operation, maintenance or use of its vehicles that fall
under the act.
Nothing relieves the insurance company from paying a final
judgment regardless of the insured's financial condition, but
form MCS-90 is not insurance. Under this form, the insured
agrees to reimburse the insurance company for any payment the
insurer would not have had to make under the terms of the basic
(unendorsed) policy. Also, if a party to a contract is asking for
additional insured status on the insured's auto policy, form
MCS-90 will not provide defense coverage for the additional
insured in the event of a pollution spill that would be covered
by the MCS-90 endorsement.
There is another endorsement that does provide insurance
(true risk transfer) for pollution spills and additional insured
status, including defense costs, when required by written
contract, and that is the "auto broadened pollution" endorsement
(ISO form CA 98 44). The endorsement amends the pollution
exclusion to provide coverage for pollution costs or expenses in
response to a request, demand, or regulatory requirement that
the insured clean up or in any way respond to or assess the
effects of pollutants that result from the upset, overturn or
damage to a covered vehicle that is being used or maintained.
This endorsement also covers pollution costs or expenses resulting from a third-party claim or suit brought by or on behalf
of a governmental authority for damages because of cleaning
up, responding to, or assessing the effects of pollutants. Cleanup
costs only are covered if they result from an accident that also
causes bodily injury or property damage. This endorsement
does not cover civil fines or penalties that may be assessed
because of a pollution spill.
Regarding auto liability, there are three endorsements that
can impact an operator's employees who drive vehicles for
company business. One is "employees as insureds" (ISO form
CA 99 33), which adds coverage for employees if they are
named in a suit when driving their personal vehicles on company
business, with coverage applying excess over their personal
auto insurance.
Another, "employee hired autos" endorsement (ISO form
CA 20 54), broadens physical damage coverage for employees
of the insured who hire or rent vehicles in their own names
while on company business. This endorsement also extends
liability protection to employees while they are operating
vehicles that have been rented or hired in their names for
company business. It requires that hired auto coverage for both
physical damage and liability be in place.
The third endorsement to consider is "fellow employee"
coverage (ISO CA 20 55), which removes the fellow employee
exclusion from the auto policy so that it can respond on behalf
of an at-fault employee for a vehicle-related injury to a fellow
employee caused by a covered vehicle.
"Drive other car" coverage (ISO endorsement CA 99 10) is
used when an employee (for example, an executive officer)
does not carry personal auto insurance because he or she is
provided with a company vehicle. Under this endorsement, individuals requiring coverage are specifically named. From a liability and physical damage perspective, the endorsement
provides nonowned auto coverage for the named individual
and his/her spouse for vehicles they do not own, or that are not
owned by members of their household, which are in their care,
custody or control. Physical damage coverage is provided only
for private passenger vehicles.
From a physical damage perspective, "auto loan/lease gap"

American Oil and Gas Reporter - December 2017

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