Commercial · Upstream oil and gas: well sites, tank batteries, compression, SWD

One oilfield fire, several policies, one Railroad Commission clock. The production records decide what gets paid.

Last updated: October 2026

A tank battery or wellhead fire can touch your property schedule, your control of well policy and your loss of production cover, and each one reads the event differently. We document and negotiate the full loss for the operator and its partners, and we tell you plainly when a question belongs with your attorney.

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5,100 BOPD

When lightning was the initial indication of a June 2018 tank battery fire in Glasscock County, the operator shut in wells making about 5,100 net barrels of oil per day. Fast shut-in limited what burned. The income claim on a loss like that rides on a day-by-day shut-in and restart record.

Source: Laredo Petroleum, SEC Exhibit 99.1, July 2, 2018.

First 72 hours

The first 72 hours after a tank battery, wellhead or compressor fire

The pumper or lease operator is often first on scene. What gets shut in, reported, photographed and kept in those first days becomes the claim record for every policy that responds.

1

Shut in the wells feeding the battery. In the Glasscock County fire, the operator's SCADA system alerted staff and fast shut-in limited how much oil burned.

2

Call the Railroad Commission district office. Rule 3.20 calls for immediate notice of fires, leaks, spills and breaks. The 24-hour line is 844-773-0305. Note the time of the call and who took it.

3

Contain runoff. At a 2017 tank battery fire near Marshall, oil reached a creek pond about 500 feet away.

4

Photograph every vessel before anything moves: burned tanks, heat-exposed tanks that look fine, separators, heater-treaters, the LACT unit, the VRU, the debris pile and where it sits.

5

Give notice to your broker and every insurer that may respond: property or inland marine, control of well, loss of production, general liability and umbrella, pollution. Log claim numbers and every call.

6

Notify your working-interest partners. Non-operators will get the bill for their share.

7

Start a shut-in log for every well: shut-in time, restart time, and the reason each one stayed down.

8

Track every dollar from day one. Frac tanks, trucking, rental compression, vacuum trucks and overtime are only recoverable if they are documented.

Your reporting duties to the RRC, TCEQ or EPA are questions for your attorney. We help you keep the record those reports create.

Sources: Laredo Petroleum Exhibit 99.1 (2018); Railroad Commission of Texas, Oil and Gas Accident Reporting; EPA response profile, Marshall, Texas (2017).

Rule 3.20

Railroad Commission notice: what Rule 3.20 says, including lightning strikes

In Texas the Railroad Commission is the first call after an oilfield fire. Its notice rule names every lightning-struck tank. The notice record also becomes one of the first dated documents in your claim.

What the rule saysDetail
Fires, leaks, spills and breaksImmediate notice to the RRC district office
LightningEvery tank struck by lightning is to be reported immediately
Oil lossesReportable above 5 barrels in aggregate
Follow-up letterLocation, steps taken and the quantity lost
24-hour emergency line844-773-0305 (toll free) or 512-463-6788

Why it matters for the claim

The call time, the follow-up letter and the volumes you reported will be compared against your claim. If the numbers differ, the insurer will ask why. Keep copies together, and keep the lightning report: it gives a dated record of cause.

Rule 3.20's source note dates it to 1970. Whether the rule applies to a specific event, and what you must report, is a question for your attorney. We do not give that advice; we make sure the claim and the notice record line up.

Sources: 16 TAC §3.20 via Justia (current through June 27, 2025); Railroad Commission of Texas, Oil and Gas Accident Reporting.

Who pays which piece

Which policy pays: property, control of well, loss of production, liability

The biggest upstream gaps sit between policies. Control of well (COW, also called operator's extra expense) often excludes lost production. General liability and property policies often exclude well control. Lost income needs its own section, commonly an optional endorsement.

Piece of the lossWhere it is usually coveredWhat to check
Tanks, separators, heater-treaters, compressors, facilitiesProperty or inland marine, by the equipment scheduleScheduled values, and like kind and quality without betterment
Regaining control of the well, including specialists and firefightingCOW Coverage AThe policy's "out of control" definition and when control was regained
Redrilling the wellCOW Coverage BThe cap, time limits to start work, and the "most prudent and economical" methods language
Seepage and pollution from an out-of-control wellCOW Coverage CDiscovery and notice windows; what is excluded
Lost production incomeLoss of production section, if you bought itIt needs a prior property or COW loss, a waiting period and an indemnity period
Rental and third-party equipment on siteCOW as care, custody and control (CCC) property; often excluded under Coverage CRental contracts and who must insure the equipment
Neighbor property and injury claimsGeneral liability and umbrellaA matter for your liability insurer and attorney, not your property claim
Pollution cleanup outside a well-control eventProperty cleanup terms or a pollution policyHow it fits with COW Coverage C; pollution policies typically exclude critical well-control costs

COW limits have traditionally run about 3 times the AFE, and one carrier offers deductibles of $25,000 to $150,000. Check whether your limits still match current well costs. How a clause applies to your facts is a legal question when it is disputed. We document the loss and present it; coverage interpretation in a dispute belongs with your attorney.

Sources: K&L Gates, Crisis Management in the Gas Patch (2016); Kinsale, Control of Well Insurance (Jan. 2026) and Top 10 Myths (Mar. 2026); Universal Sompo oil and energy package wording (illustrative form).

Control of well

Is your well "out of control"? Why that definition decides the claim

Control of well cover turns on one phrase. Definitions vary, but common elements are an unintended flow of fluid or gas, above ground or between zones, that the blowout preventer (BOP) and standard equipment cannot stop. Some wordings exclude kicks. Some exclude flow that can be circulated out or bled off through surface controls. The definition in your policy controls.

Coverage A generally ends once the well is controlled and resulting fires are out. That makes the control date a money question. Expect the insurer to argue the well was never out of control, or could have been controlled sooner.

The control timeline.

Keep an hour-by-hour log of control operations and decisions, with who made each call.

The surface equipment record.

Preserve BOP tests, drilling and workover daily reports, casing and cement records and pressure charts. They show what surface equipment could and could not stop.

Your own engineer.

Keep your own engineer's timeline of the event, separate from the insurer's well-control specialist.

Well-control events are not only a drilling problem. A 2021 analysis of IOGP data put nearly a third of well-control incidents outside drilling, and Kinsale notes failed workovers, unexpected kicks and casing failures can cost seven figures. Kinsale also cites anecdotal data from a well control provider: many small and midsize operators' COW claims come in around $2 million. That is carrier marketing, not a survey, but it sets the scale.

Whether an event meets your policy's definition is a coverage question, and in a dispute it belongs with your attorney. Our job is to make sure the record answers it.

Sources: K&L Gates (2016); Universal Sompo wording; Kinsale (Jan. and Mar. 2026).

Cause shapes the claim

Lightning, heat and runoff: how Texas tank battery fires unfold

Texas took just under 27.7 million lightning strikes in 2022, the most of any state, and 41 million in 2021. The documented Texas tank battery pattern starts with a strike, then fire threatening nearby tanks, scattered debris, and oil reaching water.

PatternDocumented exampleWhat it means for the claim
Lightning strike on a tankMarshall, 2017: a tank was reportedly struck and caught fire, and the battery smoldered after the fire was out. Glasscock County, 2018: lightning was the initial indication.Lightning is usually a covered peril, so the fight is over what was damaged and its value. The RRC lightning report gives a dated record.
Fire threatens nearby tanksCaldwell County, April 2023: one tank engulfed near Luling, three more threatened.Heat damage may not show. Inspect heat-exposed tanks for integrity, not just by eye, and photograph every vessel before debris removal.
Debris and spill off the padMarshall, 2017: tank pieces landed on a neighbor's property; about 45 barrels of oil were recovered from a creek pond.Neighbor damage goes to the liability policy and your attorney. Cleanup cost needs its own records.
Well-control eventFailed workovers, kicks and casing failures.The "out of control" definition decides coverage.
Blowout with a large spillFort Bend County, December 2017: about 240,000 gallons of crude and 30,000 gallons of sludge spilled.Expect regulatory follow-up beyond the claim. That part belongs with your attorney.
Freeze and grid failureWinter Storm Uri, 2021: components and pipelines froze and power went out.Separate freeze damage from lost power. Each can fall under a different coverage part.

What limits the damage

In the Glasscock County fire, fast shut-in cut how much oil burned, and tank inventory was low because gathering pipelines carried oil off the battery.

If lightning started it, see our lightning strike claim guide. For gas plants and larger processing sites, see refinery and petrochemical fire claims.

Sources: FOX Weather on Vaisala (2023); EPA response profile, Marshall (2017); Laredo Exhibit 99.1 (2018); FOX 7 Austin (2023); Texas Senate bill analysis describing the Fort Bend County blowout (2019); Reuters via Hydrocarbon Processing (2021); Kinsale (Mar. 2026).

The business interruption fight

Proving lost production: BOPD, shut-in lists, RRC data and restart curves

Upstream income loss is deferred or lost production, in BOPD, BOE or Mcf, times realized price, minus costs saved while wells sit shut in. It is insured only if your program has a loss of production section, and only after its waiting period. COW policies commonly exclude delayed production, so check first whether you bought the section and what your schedule says.

A restart curve, day by day

Laredo Petroleum's forecast after its Glasscock County battery fire. Company forecasts from July 2, 2018; the actual outcome was not published in the source.
Day after the fireProduction back
Day 0 (June 30, 2018)Wells making about 5,100 net BOPD shut in
Day 3 (from July 3)About 70% expected back
The following weekAbout 90% expected back
About day 31 (end of July)All production expected back

Laredo expected about a 400 BOPD hit to its third-quarter production. A quick restart like that depends on intact gathering and sales outlets. Your claim needs the same kind of record: every well, every day, with the reason it stayed down.

Using RRC production data as the baseline

  • The RRC Production Data Query (PDQ) covers Texas production by lease, field, operator, district or county from January 1993.
  • Oil is reported by lease, which may hold many wells. Each gas lease is one gas well. Crude figures exclude condensate.
  • Online data lags about two months, and records are substantially complete after about six months. Late or corrected reports can change figures.
  • PDQ cannot export results. Copy small result sets, or buy the database dump.
  • Use PDQ to corroborate your own daily records: run tickets, LACT data, purchaser statements and SCADA trends. Lease-level monthly totals cannot show a single well's daily curve.

How we build it

We do not hand the carrier one calculation. We model the loss several independent ways, against your real production volumes and pricing, against equipment lead times, and against the ramp back to full output, and use those models against each other. The look-back period matters too: a soft stretch inside a long average can drag your baseline down when it does not reflect normal operations.

What sets the restoration period

  • Replacing tanks, separators, heater-treaters and compressor packages. Get dated vendor quotes with lead times.
  • Electrical gear for pumps and compression. In Q2 2025, power transformers averaged 128 weeks and switchgear 44 weeks, per Wood Mackenzie data.
  • RRC-supervised cleanup. At Marshall, the RRC was to oversee the remaining remediation.
  • Gathering, pipeline and SWD outlets. A down outlet can keep undamaged wells shut in. Whether your wording covers a third party's outage (contingent business interruption) depends on the policy.

Extra expense to document

  • Frac tanks
  • Trucking oil while the LACT unit is down
  • Rental compression
  • Temporary flares
  • Vacuum trucks
  • Overtime
128 weeks

average lead time for power transformers in Q2 2025.

Wood Mackenzie via POWER

1.1 million b/d

drop in U.S. crude output in one week of Winter Storm Uri, matching the largest weekly fall on record.

Reuters via Hydrocarbon Processing, Feb. 2021

7,237

business interruption claims in Texas from the February 2021 freeze, with $519.5 million paid.

Texas Department of Insurance

Work the numbers with our business income worksheet.

Sources: Universal Sompo wording; Laredo Exhibit 99.1 (2018); RRC PDQ FAQs; POWER (Jan. 2026); EPA Marshall profile; Reuters via Hydrocarbon Processing (2021); TDI February 2021 winter weather summary.

Valuation

Valuing tank batteries, compressors and rental equipment

The illustrative energy package form cited here pays like kind and quality, without betterment. A rebuilt battery often differs from the burned one, and the insurer pays for what you had, not the upgrade. In one illustrative energy form, coinsurance runs at 100% of new reproduction cost less reasonable depreciation, so a stale equipment schedule can shrink every payment.

Expect depreciation and pre-existing corrosion arguments on older batteries. The same illustrative form excludes wear, corrosion and breakdown. Your answer is the asset register, original invoices, tank specs, and maintenance and inspection records.

Replacement costs have moved. Steel mill product prices rose 27.6% in the 12 months to September 2026, and Section 232 tariffs stand at 50% on steel. Price tanks, vessels and piping today, not from the schedule's last update.

Rental compression, frac tanks and other third-party equipment on site raise their own questions. Kinsale says COW treats it as care, custody and control property, while K&L Gates notes it is commonly excluded under Coverage C. Pull every rental contract and check who had to insure the equipment.

Check how an underinsured schedule could cut a payment with our coinsurance penalty calculator.

Sources: Universal Sompo wording; BLS PPI Detailed Report, Table 2 (Oct. 2026); Shapiro (Mar. 2026); Kinsale (Jan. 2026); K&L Gates (2016).

Cleanup and neighbors

Cleanup, runoff and neighbor claims

At Marshall in 2017, initial reports cited a potential 210,000-gallon discharge. About 45 barrels of oil were recovered from a creek pond, tank debris landed on a neighbor's land, and the RRC was to oversee the remaining cleanup. One lightning strike created property, cleanup and neighbor exposure under three different policies.

Your cleanup.

Cleanup cost needs its own file: contractor invoices, boom and sorbent logs, lab results and RRC sign-off. Depending on the event, it may fall under property cleanup terms, a pollution policy or COW Coverage C.

Pollution found later.

In one illustrative COW wording, Coverage C has discovery and notice windows of 60 and 90 days. Pollution must come from an out-of-control well, and subsurface contamination and fines are commonly excluded. Check your own windows now.

The neighbor.

Neighbor property and injury claims go to your liability insurer. Report them, keep the paper, and route the response through your attorney.

If part of your program sits on a standard ISO property form, its pollutant cleanup additional coverage is $10,000 per location as an annual aggregate. Read which form you have before cleanup bills pile up.

Sources: EPA Marshall profile (2017); K&L Gates (2016); Universal Sompo wording; Open Exam Prep, BPP coverage form.

Partners

Non-op owners and partners: what to send and when

A non-operating working-interest owner will get the bill for its share. It is not automatically covered under the operator's COW policy. Shared limits, percentage caps or exclusions may apply.

For the operator and the JIB manager

  • Send notice to every working-interest owner early, with the date of loss and the policies that may respond.
  • Pull the JOA insurance provisions, the AFEs and JIB statements, and each owner's working interest and NRI.
  • Tell partners which costs you expect the insurer to carry and which may come back as cash calls.

For the non-op owner

  • Ask the operator for the policy schedule and claim numbers.
  • Read your own policy, and give your own carrier notice if it may respond.
  • How the JOA allocates loss among owners is a question for your attorney.

Source: Kinsale, Top 10 Myths (Mar. 2026).

What the carrier will try

The shortfalls in these claims are predictable. So is how we fight them.

Large losses in this sector are contested on a handful of recurring fronts. None of these mean the carrier is acting in bad faith, it means the policy is complex and the default reading of it favors the insurer unless someone pushes back with documentation. Here is what they try, and what we do about each.

Not out of control

The insurer argues the event never met the policy's definition, or that a kick was excluded.

Our move: We assemble the BOP records, daily reports and pressure charts that show what surface equipment could and could not stop. A dispute over the wording belongs with your attorney.

Controlled sooner

Costs after the insurer's chosen control date are disputed.

Our move: We build the claim on the hour-by-hour control log and your engineer's timeline.

Redrill scrutiny

Spending is tested against "most prudent and economical" methods, caps and time limits.

Our move: We document bids, AFEs and the engineering basis for the method chosen.

Wear and betterment

Older batteries draw depreciation, corrosion and betterment arguments.

Our move: We document replacement cost of like kind and quality with invoices, specs, inspection records and current vendor quotes.

Lost production

The waiting period comes off first, and the restart curve is assumed shorter than it was.

Our move: We model the loss several ways from run tickets, LACT data, SCADA trends and PDQ, well by well and day by day.

Coverage C defenses

Contamination is called underground, not from a covered well, or remediated inadequately.

Our move: We assemble lab results, remediation records and RRC sign-off.

Reservation of rights

Likely triggers include the out-of-control definition, late notice, wear on old equipment, or pollution reported outside a 60- or 90-day window.

Our move: We answer in writing with documents. Coverage positions go to your attorney.

Salvage and subrogation

Salvage goes to the insurer until repaid, and the insurer takes over recovery rights after paying.

Our move: We flag master service agreements with knock-for-knock and waiver terms early, so your attorney reviews them before anything new is signed.

Texas

Texas claim rules that apply to an oilfield loss

Prompt payment deadlines

StepDeadlineSurplus lines
Acknowledge the claim and request documents15 days after notice of claim30 business days
Accept or reject in writing15 business days after receiving all requested itemsSame
Pay an accepted claim5 business days20 business days

An insurer that is liable for the claim but misses these deadlines owes 18% annual interest as damages, plus reasonable and necessary attorney's fees (Tex. Ins. Code §542.060). Whether that applies to your claim is a question for your attorney. Surplus lines and large-risk policies often use manuscript wording that departs from standard ISO terms, so read your own notice and proof-of-loss conditions.

Public adjusters in Texas

A Texas public adjuster's total fee, including expenses, may not exceed 10% of the insurance settlement. You can rescind a public adjuster contract by written notice within 72 hours of signing. A commercial policy may not prohibit you from hiring a licensed public adjuster. Claim checks must name you as payee, and a public adjuster may not endorse one for you. Public adjusters may not practice law.

Weather

All three Texas tank battery fires cited on this page involved reported or possible lightning. Freeze is the other large exposure. In the February 2021 freeze, TDI counted 7,237 business interruption claims with $519.5 million paid. Separate days lost to grid power from days lost to freeze damage on site.

Related tools: prompt payment deadlines, lost income, coinsurance.

Sources: Tex. Ins. Code §§542.055, 542.056, 542.057, 542.060, 4102.007, 4102.103, 4102.104, 4102.158; TDI commercial property filing checklist; FOX Weather on Vaisala; TDI February 2021 winter weather summary.

Checklist

Documents to pull this week

Pull these in the first week, before debris is hauled off. Each item answers a dispute described above.

Policies and notices

every policy that might respond (COW or OEE with endorsements, property or inland marine with the equipment schedule, loss of production, general liability and umbrella, pollution); the RRC notice record with call time, follow-up letter and volumes reported, including any lightning report; any EPA, National Response Center or TCEQ notices and agency correspondence.

Production and well data

daily and monthly production by well (BOPD, Mcf), run tickets, LACT records, purchaser statements and realized prices; RRC PDQ printouts for the affected leases covering at least the 12 months before the loss; a shut-in list with shut-in and restart dates for every well; SCADA alarm and trend data; well files with drilling and workover daily reports, BOP tests, casing and cement records and pressure charts.

Ownership and contracts

JOA, AFEs and JIB statements, with every working-interest owner and its NRI; master service agreements with indemnity, knock-for-knock and waiver-of-subrogation terms (for your attorney); rental agreements for third-party equipment; bonding and financial assurance filings.

Scope, cost and cleanup

asset register, original invoices, tank specs, maintenance and inspection records; photos and video before debris removal, the debris pile location, and an inventory of damaged and heat-exposed vessels; remediation records, contractor invoices, boom and sorbent logs, lab results and RRC sign-off; vendor quotes with lead times for tanks, separators, heater-treaters, compressors and electrical gear; extra expense receipts.

The insurance company's adjuster works for the insurance company.

After a major loss, the carrier sends its own adjuster, and often a forensic accountant and engineering consultants, all retained by the insurer. They are competent and they are not neutral; their job is to resolve the claim on terms favorable to the company that pays them. A public adjuster is the licensed counterweight: we represent the policyholder only, we build and present the claim, and we negotiate the settlement.

On an upstream loss the asymmetry is the whole problem. The carrier may bring a well-control specialist or engineer, a property adjuster with energy experience and forensic accountants for lost production. We document the full loss with the same rigor, and we are paid a percentage of what we recover, so our incentive is your number. We are licensed public adjusters, not attorneys: when a question turns on Railroad Commission duties, how policy language applies in a dispute, pollution liability, neighbors or service contractors, we work alongside your attorney rather than in place of one.

What happens after you call.

Loss review and policy analysis

We read the actual policy and endorsements - limits, BI and lost-production provisions, pollution and blowout terms, equipment-breakdown, exclusions and any reservation of rights - and assess the full scope before anyone commits to a number.

Document everything, including the contamination

Equipment, halted production, and any environmental contamination. Where contamination is involved we bring in industrial hygienists and environmental expertise to establish what cleanup is genuinely required, while the evidence still exists.

Build the lost-production claim, modeled several ways

From real production and financial data: volumes, pricing, equipment lead times, the restore-to-production timeline, and the right look-back baseline, modeled independently and used against each other to substantiate the full loss.

Present, negotiate, and settle

We present the documented claim, contest the predictable shortfalls - starting with the exclusions the carrier raised - and negotiate the settlement on your behalf through to resolution.

Questions upstream oil and gas operators ask

Do I have to report a lightning strike on a tank to the Railroad Commission?

Rule 3.20 (16 TAC §3.20) says every tank struck by lightning is to be reported immediately to the RRC district office. Whether the rule applies to your event is a question for your attorney. Keep the report: it gives a dated record of cause for the claim.

How fast must I notify the RRC of an oilfield fire or spill?

Rule 3.20 calls for immediate notice of fires, leaks, spills and breaks, followed by a letter stating the location, steps taken and quantity lost. The 24-hour line is 844-773-0305 or 512-463-6788.

How much spilled oil triggers an RRC report?

Rule 3.20 makes oil losses reportable above 5 barrels in aggregate. How that applies to your event is a question for your attorney. The volumes you report will be compared against your claim, so keep them consistent.

Does control of well insurance cover lost production?

Often not. COW policies commonly exclude delayed production. Lost production income needs a loss of production section, which requires a prior property or COW loss and comes with a waiting period.

What counts as a well "out of control"?

Definitions vary, but common elements are an unintended flow of fluid or gas, above ground or between zones, that the BOP and standard equipment cannot stop. Some wordings exclude kicks or flow that surface controls can handle. Your policy's definition controls, and a dispute over it belongs with your attorney.

Does my general liability policy cover a blowout?

General liability policies often exclude well-control and blowout costs and equipment in your care, custody and control. Neighbor property and injury claims do go to your liability insurer. How it responds to your event is a question for your attorney.

Which policy covers a burned tank battery?

Start with the property or inland marine section and its equipment schedule. The illustrative energy form cited here pays like kind and quality, without betterment. COW Coverage A is written around a well that is out of control as your policy defines it.

We are a non-operator. Are we covered under the operator's policy?

Not automatically. Shared limits, percentage caps or exclusions may apply. Read the JOA insurance provisions and your own policy, and give your own carrier notice if it may respond.

How do I prove lost production after a fire?

With your own daily records: run tickets, LACT data, purchaser statements and SCADA trends, plus a shut-in and restart log for every well. RRC PDQ data by lease corroborates them, though online data lags about two months.

Is there a waiting period on loss of production coverage?

Expect one. The illustrative energy form cited here builds in a waiting period and an indemnity period, and the waiting period comes off first. Check the number of days on your schedule.

Pollution showed up months later. Is it still covered?

It depends on your wording. One illustrative COW form sets discovery and notice windows of 60 and 90 days for Coverage C. Late notice is a likely reservation-of-rights trigger, so read your windows now and route coverage positions to your attorney.

Is a public adjuster the same as a lawyer?

No. Texas public adjusters are licensed by TDI to handle the insurance claim, and the Insurance Code bars them from practicing law. Railroad Commission duties, pollution liability and coverage disputes belong with your attorney. We work alongside them.

What does it cost to hire a public adjuster?

We work on a percentage of the recovery, with no upfront cost. We are only paid if and when you recover, which aligns our incentive with maximizing your settlement. Fee specifics are discussed up front before you commit to anything.

Talk to us

Tell us what happened. We will tell you straight whether you have a fight worth having.

No cost, no obligation. The fastest path is the phone - for a major loss, call and talk to a person today. A licensed Texas public insurance adjuster will review the loss with you.

713-369-4300

Start a claim review

Tell us what happened. A licensed Texas public adjuster will review the loss with you, and tell you straight whether you have a fight worth having. The review is free.

For fire claims, we call you back within 1 hour and visit your property within 24 hours or less.

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A major loss is decided in the first moves. Make yours count.

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Crossroads Insurance Recovery Advocates · TDI License 1924788

This page is general educational information about commercial property claims, not legal advice or advice on your specific claim. Crossroads Insurance Recovery Advocates, Texas public adjuster entity license #1924788.

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