Category: Energy insurance · Reviewed by Amy Price, Account Executive · Last reviewed 2026-06-05
Offshore platform insurance is the part of upstream energy insurance covering fixed and floating offshore installations used in oil and gas production, including jackets, gravity-base structures, tension-leg platforms, spars, FPSOs (floating production storage and offloading units), FPUs and FLNG units.
Category: Energy insurance Also known as: offshore installation insurance, platform insurance, FPSO insurance First codified: Lloyd’s energy wordings from 1970s; modern London Standard Drilling Barge form and bespoke FPSO wordings Related legislation: Petroleum Act 1998 [1]; Offshore Installations (Safety Case) Regulations 2015 [2]; Marine Insurance Act 1906 [3]
Offshore platforms are the production facilities used in offshore oil and gas operations. They come in several principal types:
Fixed platforms — including steel jackets (used in water depths up to about 400m) and concrete gravity-base structures (used in some North Sea installations) — are physically attached to the seabed and operate as stable production platforms for the life of the field, typically 25–40 years.
Floating production units — including semi-submersible production units, tension-leg platforms, spars and FPSOs — are buoyant structures held in position by mooring systems and used in deeper water where fixed installations are not economic. FPSOs combine production, storage and offloading functions in a single ship-shaped or barge-shaped hull.
Mobile offshore drilling units (MODUs) — including jack-up rigs, semi-submersible drilling rigs and drillships — are used for drilling rather than production and are typically chartered by E&P operators from specialist drilling contractors [4][5].
Offshore platform insurance covers all of these asset types, though with different wording approaches and underwriting characteristics. The cover responds for physical damage to the platform and its associated equipment (topsides modules, drilling derrick if mounted, accommodation block, helideck), for business interruption from lost production while damage is repaired, and (in some structures) for related contingent business interruption from disruption to associated infrastructure [4][5].
The UK regulatory regime for offshore platforms is set by the Petroleum Act 1998 (licensing), the Offshore Installations (Safety Case) Regulations 2015 (safety), the Offshore Installations (Prevention of Fire and Explosion, and Emergency Response) Regulations 1995 (PFEER, fire and emergency response), and the Offshore Installations and Wells (Design and Construction, etc.) Regulations 1996 (DCR, design and construction). The Health and Safety Executive’s Offshore Division is the principal regulator [1][2][6].
Operators of offshore installations must produce a Safety Case demonstrating that risks to personnel have been reduced to ALARP, with the Safety Case subject to HSE acceptance. The Safety Case is reviewed periodically and must be updated for material changes to the installation or its operations. Insurance underwriters typically require access to the Safety Case summary and to subsequent regulatory correspondence as part of their underwriting due diligence [2][6].
The Marine Insurance Act 1906 governs the insurance contract for offshore platforms, with the modifications introduced by the Insurance Act 2015 for non-consumer business. The Act’s principles of insurable interest (s.5), fair presentation (as modified), warranties (ss.33–41), perils insured and excluded (s.55), and average (ss.64–66) apply [3][7].
Decommissioning liability is governed by the Petroleum Act 1998 (sections 29–45), under which licensees and others with a defined relationship to an offshore installation can be required to fund decommissioning of the installation at the end of field life. Financial security arrangements may require specific insurance or surety bond provision [1][8].
A major fixed platform might be insured for total insured values (TIV) of US$2bn–US$5bn comprising the platform structure, the topsides modules (process equipment, accommodation, control systems, drilling derrick if mounted), the conductor casings, the export risers and (depending on programme design) certain subsea equipment. Business interruption cover is typically the largest component of the limit, calculated based on the operator’s working interest share of the field’s production and prevailing commodity prices [4][5].
FPSO insurance is structured differently because the asset is moveable (in principle: an FPSO can be towed away for repair or transfer to a new field). Wordings often combine marine and energy elements, with cover for the hull (on modified marine wordings) and for the topsides production modules (on modified energy wordings). The total insured value for a major newbuild FPSO can exceed US$3bn for the platform alone, plus subsea infrastructure [4][5].
Mobile offshore drilling unit insurance is normally arranged by the drilling contractor that owns the rig, on the London Standard Drilling Barge form or equivalent. Drilling rigs are typically chartered to operators on standard industry contracts (the IADC daywork drilling contract or bespoke equivalents) under which liability and insurance are allocated between contractor and operator. The drilling contractor’s hull and machinery cover responds to physical damage to the rig; the operator’s operators’ extra expense cover responds to well control costs [4][5].
Fixed platform insurance: typically on bespoke wordings reflecting the unique configuration of each platform. North Sea, Gulf of Mexico and Asia-Pacific platforms each have characteristic exposure profiles (named windstorm, ice, regulatory environment).
FPSO insurance: increasingly significant as deepwater developments rely on FPSO and FLNG units. Wordings combine marine and energy elements with substantial bespoke modification.
Subsea infrastructure insurance: covers wellheads, manifolds, flowlines, risers, umbilicals and associated equipment installed on or near the seabed. Often packaged with platform cover but sometimes separately placed.
Drilling rig hull and machinery: arranged by the rig owner, with the operator’s insurance addressing operational exposures arising from drilling activities. The interplay between contractor and operator insurance is set by the drilling contract.
Wells in progress: cover during the drilling, completion and workover phases, principally addressed through OEE rather than under the platform property programme.
A UK independent E&P operator owns and operates a North Sea fixed platform with TIV of US$1.2bn. The platform is insured for the operator’s 100% working interest share under an upstream energy property programme. Cover provides US$1.2bn per occurrence on a marine all-risks wording with named windstorm sub-limits and a US$15m deductible. Business interruption cover of US$600m is calculated on a 12-month indemnity period at expected production volumes and netback prices. The programme is led by a Lloyd’s energy syndicate with following markets in Bermuda and continental Europe. Annual programme premium is approximately US$8m–US$14m depending on market conditions and claims experience. Figures in this example are illustrative.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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