Recently inherited land (and mineral rights) of vacant and undeveloped property in Canadian county OK and was trying to obtain liability insurance (which seems to me the right thing to do), but no companies I have found yet are willing to insure the property as there is a gas well on the property that is active/producing, albeit very little revenue. Some companies said they will however provide hunters insurance, which I have not given anyone permission yet to hunt on the property. Wondering if anyone knows if obtaining insurance is possible or is this simply a risk you take if you put a well on your property? Or is there another option for me to consider. Thanks
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Not an endorsement, but you might want to check with Oklahoma Farm Bureau or Farm Bureau Mutual. Another idea is to transfer the surface interest into an LLC to limit liability. Or both.
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In general, my understanding is that the operator and the working interest owners carry liability insurance for the wells, not the mineral owners, so that may enable you to only insure the surface. Check with an insurance professional.
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We have had liability insurance on land with a producing well for many years with Okla Farm Bureau. Not expensive.
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Thank you, will check with OFB.
Thank you, will check with OFB. Yes, LLC might be route to consider.
thank you for the insight. Appreciate it.
Something you might want to check in to: “no trespassing" signs can be a helpful tool to deter trespassers and provide a legal basis for defense against liability…
The well area would be considered an attractive nuisance, and should be secured and insured for liability by the operating company.
Agreed. We did have some additional No Trespassing signs added around the property as precaution. Thanks for advice.
Should you have a homeowners insurance policy, the liability coverage may extend to this property. Your agent can advise you.
Unless you are actively participating in the well (and I would NEVER recommend that because you can be “operated to death” by the well operator) then you should be free of any environmental liability by virtue of the innocent landowner defense. The 1986 amendments to CERCLA (Superfund Amendments and Reauthorization Act of 1986) expanded the third-party defense by creating innocent landowner exclusions to the definition of a “contractual relationship.” Previously, the deed transferring title between a PRP and the new landowner was a “contractual relationship” that prevented the new landowner from raising the traditional CERCLA third party defense.
Your lease should include a hold harmless clause. “A landlord hold harmless clause in a lease requires a tenant to assume responsibility for injuries, damages, or legal actions that occur on the leased property due to the tenant’s activities, releasing the landlord from liability for such claims.”
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