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Energy

To identify the territory of regulation and tax of an energy risk consider:

  1. The nature of the cover provided;
  2. The physical location of the property; and
  3. The location of the insured’s business establishment(s).

Offshore property
Offshore liability
Onshore property
Onshore liability
Production vessels hull and liability

Offshore property

Offshore property insurance provides cover for losses arising from physical damage to structures located offshore and may include business interruption.

  • Fixed property
  • The risk location for immovable property, i.e. oil rigs fixed to the sea bed, oil wells and pipelines, is the territory in which the property is situated (territorial waters). If the policy insures offshore property at more than one location, and those locations are in more than one territory’s waters, there will be multiple risk locations.

    Please note: In some territories, e.g. Canada and the US, the location of the insured’s residence or business establishment creates a risk location irrespective of the physical location of the insured property. Consequently, if the insured property is in a different territory from the insured’s residence or business establishment, there are two territories for regulation and tax.

  • Moveable property
  • In most territories, the risk location is where the moveable property is normally situated.

    The main exception to this rule is in the EEA where the regulatory risk location for moveable property is the territory where the insured is resident but the tax risk location remains the location of the moveable property.

    If the contract covers moveable property situated in more than one territory there may be multiple risk locations.

    Where the moveable property’s location is uncertain or variable, the risk location is the territory in which the insured’s residence or business establishment is located.

    Please note: In some territories, e.g. Canada and the US, the location of the insured’s residence or business establishment creates a risk location irrespective of the physical location of the insured property. Consequently, if the insured property is in a different territory from the insured’s residence or business establishment, there are two territories for regulation and tax.

Offshore liability

Offshore liability insurance covers the liabilities of operators of offshore structures or contractors working on them, including liabilities arising from pollution incidents. The offshore structure may constitute a business establishment for the purposes of risk location. The risk location is the territory in which the insured’s business establishment is located.

If more than one business establishment is covered, then each may individually create a risk location.

Onshore property

Onshore property insurance covers losses arising from physical damage to onshore structures and property and may include business interruption.

  • Fixed property
  • The risk location for immovable property, i.e. oil refineries, wind turbines, processing plants and pipelines, is the territory in which the property is situated. If the onshore property is situated in more than one territory there will be multiple risk locations.

    Please note: In some territories, e.g. Canada and the US, the location of the insured’s residence or business establishment creates a risk location irrespective of the physical location of the insured property. Consequently, if the insured property is in a different territory from the insured’s residence or business establishment, there are two territories for regulation and tax.

  • Moveable property
  • In most territories, the risk location is where the moveable property is normally situated.

    The main exception to this rule is in the EEA where the regulatory risk location for moveable property is the territory where the insured is resident but the tax risk location remains the location of the moveable property.

    If the contract covers moveable property situated in more than one territory there may be multiple risk locations.

    Where the moveable property’s location is uncertain or variable, the risk location is the territory in which the insured’s residence or business establishment is located.

    Please note: In some territories, e.g. Canada and the US, the location of the insured’s residence or business establishment creates a risk location irrespective of the physical location of the insured property. Consequently, if the insured property is in a different territory from the insured’s residence or business establishment, there are two territories for regulation and tax.

Onshore liability

Onshore liability insurance covers the liabilities of operators of onshore structures and property or contractors working on them. The onshore structure may constitute a business establishment for the purposes of risk location. 

The risk location is the territory in which the insured’s business establishment is located.

If more than one business establishment is covered, then each may individually create a risk location.

Production vessels hull and liability

Production vessels’ hull and liability insurance covers damage to a production vessel’s hull and the liability of its operator.

The risk location is determined in the same manner as ship’s hull and liability contracts

Risk locator tool

Establish the location of your risk

Contacts

Lloyd's International Trading Advice (LITA)
+44 (0)20 7327 6677