Nationwide Mutual announces that it will not be covering this gas drilling process.
The latest insurance news has identified an action that could become a trend among insurers, as Nationwide Mutual announced that it will not provide coverage for fracking.
This process involves drilling for gas by blasting deep into the ground with chemical rich water.
A spokesperson for Nationwide Mutual, Nancy Smeltzer, made insurance news when the details were released. She stated that the policies offered by the company – based in Columbus, Ohio – for both commercial and individual customers, “were not designed to cover” the risk of fracking, which is the slang term for hydraulic fracturing.
The insurance news statement involves chemically treated water injections into wells.
This process then causes shale located thousands of feet beneath the surface to cause a release of oil or gas. New York, Pennsylvania, Ohio, and West Virginia, as well as other parts of the country, are all rich in deposits of shale.
Environmental and health groups made insurance news by speaking out against the risk of contamination.
They said that fracking can cause contamination to make its way into drinking water. However, the gas industry has also released its own insurance news statements that have said that when hydraulic fracturing is done properly, it is considered to be entirely safe.
Equally, though, Nationwide Mutual has said that the risks that are involved in the operations that use fracking “are too great to ignore”. It pointed out that these risks apply to the policies of landowners who lease their properties to the gas companies that use fracking, as well as to the commercial contractors who actually use the technique.
In this most recent insurance news from Nationwide Mutual, the company pointed out that they were neither cancelling their policies, nor changing their coverage or guidelines. They were simply seeking to underline that losses related to fracking have never been covered by those policies and that it does not intend to include that risk among its covered perils. It highlighted that the policies that are sold by the company were not designed for that type of risk and will therefore not provide that coverage.
