Crime Insurance For Oil, Gas, and Energy Businesses

The oil, gas, and energy sectors operate in a complex landscape filled with unique risks, ranging from environmental liabilities to cyber threats and fraud. Among these, crime-related risks—such as theft, cybercrime, and fraudulent activities—pose significant challenges that can disrupt operations and cause substantial financial losses. As these industries continue to evolve, so too does the need for comprehensive crime insurance tailored to their specific vulnerabilities.

Understanding the nuances of crime insurance in this sector is crucial for business leaders, risk managers, and insurance professionals aiming to safeguard assets and ensure operational continuity. This article delves into the essentials of crime insurance for oil, gas, and energy businesses, highlighting current trends, emerging risks, and best practices for effective coverage.

Given the rapid growth in casualty insurance for this sector—projected to nearly double from $6.3 billion in 2025 to $12 billion by 2030 at a CAGR of 9.1%—the importance of specialized insurance solutions cannot be overstated. For more detailed market insights, refer to the HTF Market Intelligence report.

The energy industry is particularly susceptible to a variety of crime risks that can impact both physical and digital assets. These risks include theft of equipment and materials, employee dishonesty, cyberattacks targeting operational technology, and fraudulent schemes that exploit complex supply chains.

One of the most pressing concerns today is cybercrime. The sector's increasing reliance on digital infrastructure has made it a prime target for cybercriminals aiming to disrupt operations or steal sensitive data. A 2022 report by Amwins identified key cyber trends affecting the energy sector, including vendor and supply chain risks, targeted attacks, and incidents causing bodily injury or property damage due to cyber events. These evolving threats highlight the critical need for tailored cyber insurance within broader crime insurance policies.

Moreover, internal fraud and misconduct remain significant issues. According to a 2024 survey by KPMG, 78% of employees in the energy sector reported witnessing wrongdoing within their organizations in the previous year, with 43% believing such behavior could severely damage public trust. These statistics underscore the importance of robust ethics and compliance programs to mitigate fraud risks and foster a culture of integrity.

The Impact of Cybercrime on Energy Businesses

Cyber risks in the oil and gas industry have escalated dramatically, prompting insurance providers to develop more specialized coverage options. In August 2025, WTW emphasized the growing cyber threats faced by the sector and the necessity for bespoke insurance solutions that address these unique vulnerabilities.

Despite the increasing awareness, a 2023 Moody’s survey revealed a concerning gap: only 51% of oil and gas companies have standalone cyber insurance, compared to 78% in other industries. This disparity leaves many organizations exposed to potentially devastating cyber incidents without adequate financial protection.

Given the complexity and potential severity of cyberattacks, integrating cyber coverage within crime insurance policies is becoming a strategic imperative for energy businesses seeking to mitigate operational and reputational risks.

In addition to cyber threats, the physical security of energy assets is under constant scrutiny. With pipelines, refineries, and power plants often located in remote areas, they can be vulnerable to sabotage and theft. Criminal organizations may target these facilities to steal valuable materials or disrupt supply chains, leading to significant financial losses and operational downtime. The implementation of advanced surveillance technologies and security protocols is essential to safeguard these critical infrastructures. Moreover, collaboration with local law enforcement agencies can enhance security measures and ensure rapid response to any incidents.

Furthermore, the rise of environmental crimes, such as illegal dumping and oil spills, poses additional challenges for the energy sector. These activities not only threaten ecosystems but can also lead to severe legal repercussions and financial penalties for companies found liable. As regulatory scrutiny increases, energy firms must prioritize environmental compliance and invest in sustainability initiatives to mitigate risks associated with environmental crime. This proactive approach not only protects the environment but also enhances corporate reputation and stakeholder trust in an increasingly eco-conscious market.

Crime insurance for oil, gas, and energy businesses typically encompasses several critical coverages designed to address the sector’s distinctive risk profile. Understanding these components helps companies tailor their policies to fit their operational realities.

Employee Dishonesty and Fraud Coverage

Internal fraud, including employee theft and dishonesty, is a major concern in the energy sector. Coverage for these risks protects companies against financial losses resulting from fraudulent acts by employees or trusted insiders. Given the high incidence of reported wrongdoing in this industry, as highlighted by KPMG, this coverage is essential for maintaining financial stability and public trust.

Implementing strong ethics and compliance programs, as advised by experts like Scott Avelino of KPMG, can reduce the frequency and impact of such incidents, complementing insurance protection. Furthermore, regular training sessions on ethical conduct and the establishment of whistleblower policies can empower employees to report suspicious activities, creating a culture of transparency and accountability within the organization. This proactive approach not only mitigates risks but also enhances the overall integrity of the company.

Theft and Property Crime Protection

Physical theft of equipment, materials, or intellectual property remains a tangible threat, especially in remote or high-value operational sites. Crime insurance policies often include coverage for such losses, helping companies recover quickly without severe financial disruption. The importance of this coverage cannot be overstated, as the energy sector often relies on expensive machinery and proprietary technology that, if stolen, could lead to significant operational setbacks and increased costs associated with replacement and downtime.

Moreover, energy companies are increasingly investing in advanced security measures, such as surveillance systems and access control technologies, to deter theft and protect their assets. These investments not only help in reducing the likelihood of theft but can also result in lower premiums on crime insurance policies, as insurers recognize the reduced risk profile of companies that take proactive security measures.

Cybercrime and Data Breach Coverage

Given the sector’s digital transformation, coverage for cybercrime—including ransomware attacks, data breaches, and business interruption due to cyber incidents—is increasingly integrated into crime insurance packages. This coverage addresses the financial consequences of cyberattacks, including costs related to system restoration, legal liabilities, and regulatory fines.

The 2021 study published on arXiv underscores the growing relevance of cybercrime in insurance portfolios, highlighting ransomware and government impersonation as major risk contributors. This research supports the need for comprehensive cybercrime coverage within the energy sector’s insurance framework. As energy companies continue to adopt IoT devices and smart technologies to optimize operations, they must also prioritize cybersecurity measures, such as regular software updates and employee training on recognizing phishing attempts. By fostering a robust cybersecurity posture, energy companies can not only protect their sensitive data but also enhance their resilience against the evolving landscape of cyber threats.

While crime insurance addresses many risks, the oil and gas industry faces particular challenges when it comes to environmental and cyber liabilities. These challenges often create coverage gaps that require careful navigation.

Environmental Risk Exclusions

Loren Henry, VP of Jencap’s Environmental & Energy Practice, points out that environmental risks are increasingly difficult and expensive to insure. Pollution coverage, which is critical for energy companies, is frequently excluded or limited in standard energy insurance policies. This situation necessitates separate environmental liability policies or endorsements to fill these gaps.

Understanding these exclusions is vital for companies to avoid unexpected liabilities and ensure comprehensive risk management. Moreover, the regulatory landscape surrounding environmental liabilities is constantly evolving, with stricter compliance requirements and increased scrutiny from government agencies. Companies must stay informed about changes in legislation that could impact their liability exposures. Engaging with environmental consultants can also provide valuable insights into best practices for minimizing risks and enhancing sustainability efforts, which may lead to more favorable insurance terms.

Rising Cyber Threats and Insurance Gaps

The dynamic nature of cyber threats means insurers must continuously adapt their offerings. However, the relatively low adoption rate of standalone cyber insurance in the oil and gas sector, as revealed by Moody’s, indicates a persistent vulnerability. Companies often underestimate the full scope of cyber risks or rely on general crime policies that may not adequately cover sophisticated cyberattacks.

Addressing these gaps requires not only enhanced insurance products but also proactive risk management strategies, including vendor risk assessments and employee training on cybersecurity best practices. Furthermore, the integration of advanced technologies, such as artificial intelligence and machine learning, can help companies identify vulnerabilities and respond to threats more effectively. By fostering a culture of cybersecurity awareness and investing in robust IT infrastructure, organizations can significantly mitigate their risk profile and potentially lower their insurance premiums over time. The collaboration between IT departments and risk management teams is essential in creating a comprehensive approach to both cyber and environmental risk management.

Effective management of crime risks goes beyond purchasing insurance. It involves a holistic approach combining prevention, detection, and response strategies tailored to the unique needs of oil, gas, and energy companies.

Implementing Robust Ethics and Compliance Programs

As emphasized by KPMG’s Scott Avelino, strong ethics and compliance frameworks significantly reduce instances of fraud and misconduct. These programs foster a culture of accountability and transparency, which can deter internal wrongdoing and enhance organizational resilience.

Regular training, clear reporting channels, and leadership commitment are key elements that support these efforts. Furthermore, integrating ethical decision-making into everyday business practices can empower employees at all levels to act responsibly and report suspicious activities without fear of retaliation. This proactive stance not only strengthens the ethical foundation of the organization but also cultivates trust among stakeholders, including employees, clients, and investors.

Enhancing Cybersecurity Measures

Given the prevalence of cybercrime, investing in advanced cybersecurity technologies and protocols is critical. This includes continuous monitoring, incident response planning, and employee awareness initiatives to mitigate cyber risks effectively.

Collaboration with insurers to understand policy coverage and limitations can also help companies align their cybersecurity investments with insurance requirements. Additionally, conducting regular vulnerability assessments and penetration testing can identify potential weaknesses in the system before they can be exploited by malicious actors. By fostering a culture of cybersecurity awareness, organizations can empower their workforce to recognize phishing attempts and other cyber threats, thereby creating a robust first line of defense against cyber intrusions.

Leveraging Insurance as a Risk Transfer Tool

Crime insurance should be viewed as a vital component of a broader risk management strategy. Selecting policies that address the full spectrum of crime-related exposures—including employee dishonesty, theft, and cybercrime—ensures that companies are financially protected against unforeseen events.

Engaging with knowledgeable brokers and insurers who specialize in the energy sector can facilitate the design of customized insurance solutions that reflect operational complexities. Moreover, it is essential for companies to regularly review and update their insurance policies in response to evolving threats and changes in business operations. This proactive approach not only ensures comprehensive coverage but also helps organizations stay ahead of emerging risks, ultimately contributing to a more resilient business model in the face of an ever-changing risk landscape.

As the oil, gas, and energy industries continue to face evolving threats, crime insurance will play an increasingly important role in risk mitigation. The market’s rapid growth, as highlighted by HTF Market Intelligence, reflects rising demand for specialized coverage that addresses both traditional and emerging risks.

Insurers are expected to innovate with more granular policies that integrate cyber coverage, environmental liabilities, and crime protections into cohesive packages. Meanwhile, companies must remain vigilant and proactive in managing risks through technology, governance, and insurance.

Staying informed about industry trends and collaborating closely with insurance partners will be essential for energy businesses aiming to safeguard their assets and reputation in a challenging risk landscape.

In addition to traditional crime risks such as theft and fraud, the energy sector is increasingly vulnerable to sophisticated cyberattacks that can disrupt operations and compromise sensitive data. As hackers become more adept at exploiting vulnerabilities in digital infrastructure, the need for comprehensive crime insurance that includes cyber liability is paramount. This expanded coverage not only protects against financial losses but also provides resources for crisis management and recovery, enabling companies to respond swiftly to incidents and mitigate reputational damage.

Moreover, the integration of environmental liabilities into crime insurance policies reflects the growing recognition of the interconnectedness of these risks. Energy companies are under increasing scrutiny regarding their environmental impact, and any incident that results in pollution or regulatory fines can have severe financial repercussions. By bundling crime and environmental coverage, insurers can offer a more holistic approach to risk management, ensuring that businesses are equipped to handle a wide range of potential threats while promoting sustainable practices within the industry.

For further insights into cyber risks and tailored insurance solutions, the WTW report from August 2025 offers valuable perspectives.