How Prior Claims Affect Workers’ Comp Options for Oil and Gas Businesses

Oil and gas businesses face some of the most complex challenges when it comes to workers’ compensation insurance. The industry is high risk by nature, involving heavy equipment, hazardous materials, remote job sites, and physically demanding work. Unfortunately, these risks often lead to claims being filed, and once a company develops a history of prior claims, securing affordable workers’ compensation coverage becomes even harder.

If you own or operate an oil and gas business, you may already know the frustration of being denied coverage or quoted premiums that feel impossible to manage. Prior claims can make insurance companies cautious, causing them to either raise rates, impose restrictive terms, or decline coverage altogether. But even if you have a history of claims, it does not mean your business is out of options. At NPN Brokers, we specialize in helping high risk businesses like those in oil and gas secure workers’ comp coverage, even when past claims are an obstacle.

In this blog, we’ll break down exactly how prior claims affect your workers’ compensation insurance options, why many insurers hesitate to cover businesses in oil and gas, and how NPN Brokers can step in to get you the coverage you need quickly and at competitive rates.

Why Prior Claims Matter in Workers’ Comp Insurance

Workers’ compensation is designed to protect employees who are injured or made ill on the job while also protecting employers from devastating lawsuits. When an insurer evaluates whether to provide a policy, one of the first things they look at is the employer’s loss history, or record of prior claims.

For oil and gas businesses, this loss history is especially critical. If your company has had a series of claims, whether they are related to equipment accidents, chemical exposures, or falls at drilling sites, insurers see this as a red flag. Each claim signals higher risk, and in the eyes of many underwriters, higher risk means higher cost or outright denial.

Loss history is not the only factor insurers review, but it carries significant weight because it provides a track record of how costly your workforce has been in the past. A single large claim or multiple smaller claims can change the way insurance carriers view your company.

How Prior Claims Can Limit Your Options

When you have prior claims, the pool of insurers willing to work with your business often shrinks. Here are some of the most common effects you might face:

Denial of Coverage

In high risk industries like oil and gas, many insurers already hesitate to take on new business. If your company has prior claims, you may find that standard insurance markets will not write a policy at all. Instead, you might be forced into state assigned risk pools, which are typically more expensive and less flexible.

Higher Premiums

Insurance is all about risk. If your company has prior claims, insurers assume that future claims are more likely, which directly impacts your premiums. They may calculate your rates using an experience modification factor (EMR), a number that adjusts your premium based on your claims history compared to others in your industry. A higher EMR means higher premiums. For oil and gas companies, where premiums are already high, even a small increase can have a major financial impact.

Stricter Underwriting Terms

Insurers who are willing to provide coverage may impose stricter requirements. This could include larger down payments, mandatory audits, longer contracts, or conditions tied to safety programs and loss prevention measures. While some of these requirements can help improve workplace safety, they can also strain cash flow and add administrative burdens.

Limited Policy Flexibility

Some carriers will only offer restrictive policies to businesses with prior claims. You may find fewer options for Pay As You Go plans or policies without upfront deposits. This lack of flexibility can make it harder to manage costs, especially in an industry with fluctuating payrolls tied to contract work and seasonal operations.

Why Oil and Gas Businesses Face Even More Scrutiny

It is important to recognize that oil and gas businesses are already considered high risk by insurance carriers. Between heavy machinery, explosive materials, confined spaces, and challenging environments, the chances of injury are greater than in many other industries.

When you add prior claims into the equation, the difficulty multiplies. Insurers often see it as confirmation of their assumptions about the industry’s dangers. Even if your claims were isolated incidents or tied to circumstances that have since been corrected, insurance companies may still use them as justification for higher premiums or stricter terms.

This is where many oil and gas businesses feel stuck: pay exorbitant premiums, settle for minimal coverage, or go uninsured, which can leave the company exposed to serious legal and financial risks.

The Financial Impact of Prior Claims

The cost implications of prior claims go beyond just higher premiums. Let’s break down some of the ways claims history can affect your bottom line:

• Increased Experience Modification Factor (EMR): Each claim can increase your EMR for several years. A high EMR can raise your premiums by 20, 30, or even 50 percent compared to competitors with clean records.
• Lost Business Opportunities: Many contracts in the oil and gas industry require proof of workers’ compensation coverage. Without affordable coverage, you may be disqualified from bidding on jobs.
• Cash Flow Challenges: Larger deposits or limited Pay As You Go options can strain your working capital, especially during slower seasons or before major projects begin.
• Indirect Costs of Claims: Beyond insurance, prior claims can also affect productivity, employee morale, and even OSHA oversight, all of which carry financial consequences.

What Oil and Gas Employers Can Do to Mitigate the Impact

Even though prior claims follow your business, there are steps you can take to limit their effect on your workers’ comp options. Some strategies include:

• Strengthen Safety Programs: Insurers want to see proactive measures in place to prevent future claims. Regular training, updated safety protocols, and documented compliance with industry standards can demonstrate your commitment to reducing risk.
• Investigate Claims Thoroughly: Make sure each claim is properly documented and investigated. This helps ensure only legitimate claims are filed and prevents unnecessary costs from being added to your loss history.
• Return to Work Programs: Implementing structured return to work programs can reduce claim severity and show insurers that you are taking steps to limit payouts.
• Work with a Specialized Broker: Partnering with a broker who understands high risk industries can open the door to insurance markets that traditional carriers may overlook.

How NPN Brokers Can Help Oil and Gas Businesses with Prior Claims

At NPN Brokers, we recognize how difficult it can be for oil and gas businesses with prior claims to secure affordable workers’ compensation coverage. That is why we have built relationships with carriers who are willing to work with high risk companies, regardless of loss history.

Here’s how we can help your business:

• Coverage in as Little as 24 Hours: We know oil and gas projects move fast, and insurance delays can cost you contracts. We can often secure coverage within a single day.
• No Deposits, No Contracts, No Audits: We work with insurance companies that allow Pay As You Go plans, giving you flexibility and eliminating upfront financial hurdles.
• Access to Competitive Rates: Even with prior claims, we can shop your business to carriers who offer better pricing than state assigned risk pools or standard markets.
• Specialization in High Risk Industries: Our team works every day with businesses in oil and gas, construction, staffing, and other high risk fields. We know the challenges you face and the best way to get coverage.
• Personalized Support: Instead of cookie cutter policies, we match you with coverage that fits your operations and helps keep your workforce protected.

Why Acting Now Matters

If your business has prior claims, the sooner you act, the better. Claims typically impact your EMR for three years, meaning the longer you wait, the longer you will continue paying inflated premiums. By securing coverage now through NPN Brokers, you can keep your business compliant, protect your employees, and position yourself for future growth.

Failing to maintain workers’ compensation insurance is not just risky. It can lead to steep penalties, lawsuits, and lost contracts. Do not let prior claims hold your business back from securing the jobs and opportunities you need to thrive.

Get Workers’ Comp for Your Oil and Gas Business Today

Prior claims do not have to be the end of the road when it comes to securing workers’ compensation insurance. While many insurers may hesitate to cover oil and gas businesses with a history of claims, NPN Brokers has the experience, relationships, and resources to get you insured quickly.

If your business has struggled with high premiums, denied applications, or limited coverage options due to past claims, we can help. Call NPN Brokers today at (561) 990-3022 or fill out our online quote request form to get a workers’ comp quote in minutes. Coverage can be in place within 24 hours, giving you peace of mind and the ability to focus on running your business.