GasFields Commission Working Group – Landholder Liability Insurance

GasFields Commission Queensland (the Commission) has today convened a working group to discuss landholder liability insurance with key insurance, agriculture and gas industry peak bodies and government regulators, including the Insurance Council of Australia, AgForce Queensland, Cotton Australia, Queensland Farmers Federation, Australian Petroleum Production & Exploration Association, Queensland Resources Council, Department of Resources, and Department of Agriculture and Fisheries.

A number of key facts and recommendations relating to this insurance matter were agreed by all parties participating in the working group (see below). The Commission along with key landholder groups, industry peak bodies and relevant government agencies are continuing to work together to better understand the issue and its implications for landholders – in order to provide advice and support to any affected landholders.

Key facts and recommendations:

• In response to some landholder concerns about not being able to secure liability insurance for their farming operations, the Commission has confirmed there are multiple insurers continuing to offer public liability insurance for landholders who have gas activities on their properties. Landholders should discuss coverage with their insurance agent/broker and ensure they understand the extent of the cover being offered
• Insurance Australia Group (IAG), has announced its subsidiary, WFI, will align its policies with its subsidiary CGU and not provide liability insurance to landholders if there is any petroleum and gas activity (including infrastructure) on their property
• Each landholder’s situation is different, so it is appropriate for individual landholders to discuss with their insurance agents/brokers their circumstances regarding liability insurance cover and how it relates to petroleum and gas activity (including infrastructure) on their property
• It is also recommended landholders speak directly with the petroleum and gas companies operating on their property to discuss this matter and work together to ensure appropriate arrangements are in place to enable landholders to effectively manage risks associated with the operation of their farming businesses
• If landholders have any outstanding concerns after discussing this matter with their insurance broker and companies operating on their land, the Commission stands ready to assist.

Background information:

• Gas proponents hold public liability insurance for their own activities and infrastructure, and typically provide landholder indemnities in case there is unforeseen damage resulting from gas activities being carried out. It is also usual for gas proponents to take steps, and work with landholders, to prevent damage to gas infrastructure
• IAG has advised their decision is based on a risk assessment and that WFI’s and CGU’s core business is to insure farming businesses, not petroleum and gas businesses
• WFI’s insurance coverage decision will mean that any landholder who currently has petroleum and gas activity (including infrastructure) on their property and who is currently insured by WFI will lose their liability insurance coverage when their policy comes up for renewal
• WFI’s insurance coverage decision also means that any landholder who is currently insured by WFI and has no petroleum and gas activity (including infrastructure) on their property, but may be negotiating with a petroleum and gas company now or in the near future to allow them to undertake petroleum and gas activity (including putting associated infrastructure) on their property, may also lose their liability insurance coverage when and if their policy is renewed
• Under the Petroleum and Gas (Production and Safety) Act 2004 landholders are not liable to anyone for any harm arising out of petroleum and gas activities on their properties, except to the extent they contributed to the harm (s 563A).