Mosaic launches unique energy-transition product
Bermuda-based specialty insurer Mosaic has developed a “pioneering” climate solution to support the growing number of companies working to remediate abandoned and orphaned oil and gas wells across North America.
The company’s environmental team has launched a hybrid pollution product that de-risks efforts to plug disused wells, spurred by US government incentives.
“Mosaic is proud to be at the forefront of supporting companies tackling this urgent challenge that enables real progress on climate mitigation,” said Karen Reilly, Mosaic’s head of Americas, environmental liability.
“Our innovative, responsive coverage brings certainty to the many liabilities involved. By doing so, Mosaic is helping unlock the growth of projects that directly reduce greenhouse gas emissions — a win for our partners, our industry, and the planet.”
According to the US Environmental Protection Agency, an estimated two million inactive, unplugged oil and gas wells are scattered across the US. The sites pose significant environmental and health threats, from leaking toxic chemicals to releasing methane, a potent greenhouse gas contributing to climate change.
In 2021, the US federal Orphaned Well Program was established under America’s Bipartisan Infrastructure Law, providing $4.7 billion in funding to plug, cap and reclaim orphaned oil and gas wells and related facilities on US federal lands. Federal and provincial government incentive programmes have also been launched to clean up wells across Canada.
“We saw an opportunity to bridge the divide between traditional Contractors Pollution Liability [CPL] and standard Control of Well [COW] policies,” said Mosaic environmental specialist Max Horn (pictured), who worked closely with global broker Aon and Tradewater, a project development company which focuses on preventing greenhouse gas emissions.
Mosaic and Aon have entered into an exclusive distribution agreement for the new plug-and-well exit liability product to bring the solution to project owners, well-plugging contractors, and buyers of carbon credits generated from well-plugging operations.
Horn continued: “While CPL typically covers pollution events and COW covers well control and re-drill costs, neither fully addressed the needs of orphaned well remediation projects. Mosaic created a tailored solution that combines the two, offering more comprehensive protection for this evolving risk.”
Environmental liability is one of seven lines of specialty business at Mosaic: others include cyber, transactional liability, political risk, political violence, professional liability and financial institutions.
Horn is also developing a product for the equally fast-growing sphere of carbon capture and sequestration (CCS) at Mosaic.
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