What happened: Oil and gas companies are facing skyrocketing insurance costs and limited coverage options as a result of abusive and unnecessary lawsuits. 

Tell me more: The industry has seen a surge in auto insurance claims, with settlements rising from $50,000 a decade ago to $500,000 to $1 million today, placing significant financial strain on oilfield operators.

• Paired with the inflation of rank-and-file lawsuit settlements, the threat of nuclear verdicts—or jury awards exceeding $10 million—further exacerbates these rising costs and creates an unpredictable legal environment.

In his own words: “Oil and gas carriers have a target on their back. The easiest way for everyone to win is for legislation to establish guidelines.”—Ryan Edgmon, managing director of the energy division at Higginbotham Insurance and Financial Services 

TLR Thoughts: Texas’ energy industry isn’t alone in facing unsustainable insurance costs that threaten its ability to operate and create jobs. Every Texan is feeling the effect of unnecessary litigation on their insurance premiums, whether a small business or a family renewing their personal automobile insurance coverage. Without legislative action to address the abusive litigation tactics that drive these lawsuits—like inflated medical bills—we’ll all continue to pay the price.

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