Hydrofracking and insurance: What the industry needs to know

A look at the different kinds of claims energy and hydrofracking companies can face

Hydrofracking—the practice of extracting natural gas from shale rock deposits using pressurized water and chemicals—has seen more and more media coverage over the past few years. This coincides with the increased use of the technology by energy companies seeking out new sources of natural gas. Much of this media coverage has focused on the alleged negative effects of hydrofracking, including environmental contamination and even manmade earthquakes. Given such alleged risks, it is likely the insurance industry will be called upon more and more to make decisions regarding policy coverage for hydrofracking.

There have already been more than 20 lawsuits alleging that hydrofracking has resulted in the contamination of the environment—specifically to the detriment of aquifers, surface water and air quality. The lawsuits have brought a variety of claims, ranging from illness and injury caused by drinking water from aquifers contaminated by hydrofracking operations, to geologic change, pressure explosions, property devaluation, and loss of crops and livestock.

Contributing Author

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Greg Hoffnagle

Greg Hoffnagle is an attorney in the New York office of Edwards Wildman Palmer, and focuses his practice on international litigation and arbitrations involving energy/environmental, technology, cyber risk and securities insurance...

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