Drilling rig insurance has to follow a machine that works where most plant never goes: remote stations, mine leases, tight urban sites next to buildings, and well below the surface. Water bore, geotechnical, blast hole and piling rigs each carry a different mix of risks, but they share one problem: some of the most expensive losses happen out of sight. Our drillers insurance page sets out the covers we arrange. This guide explains how the pieces fit together and where the gaps usually sit.
What Drilling Rig Insurance Needs to Include
- The rig. Own damage for the rig itself, whether truck-mounted, track-mounted or trailered.
- Tooling. Drill rods, casing, hammers, bits, augers and core barrels, which together can be worth a large part of the rig’s value.
- Support equipment. Compressors, mud pumps, water carts, rod trucks and support vehicles.
- Downhole equipment. Tools below the surface, which many policies treat differently from tools on the rig.
- Liability. Damage to underground services and property, contamination, and injury to others.
- Transit. Movement between sites, often over long distances.
Rigs are commonly insured alongside other plant under a machinery and equipment insurance policy, with liability placed separately or as part of a package.
How Rig Types Differ
Water Bore Rigs
Long travel to rural properties, remote sites and unsealed roads. The liability questions centre on aquifers, the landholder’s existing bores and infrastructure, and a bore that collapses or never produces water.
Geotechnical Rigs
Often small rigs working on tight urban sites, close to buildings, footpaths and dense underground services. The results feed into someone else’s design, which raises a professional indemnity question covered below.
Blast Hole Rigs
Quarries and mine sites, with abrasive conditions, heat and dust. Fire suppression and site requirements dominate. Our article on mining contractor insurance requirements covers what mine operators commonly ask for.
Piling Rigs
Tall masts and heavy loads on ground that may not be as firm as it looks, so tip-over is a real exposure. Piling also brings vibration and loss of support claims from neighbouring structures, which some liability policies exclude or restrict. Declare piling work specifically.
Downhole Tools Lost in the Hole
Rods, bits and hammers get stuck. Sometimes they can be recovered by fishing; sometimes the hole is abandoned with the tools still in it. It is a routine part of drilling, and it is a loss drillers often assume the plant policy will pick up when it may not.
Many plant policies exclude equipment while it is below the surface, or offer it only as an extension with its own limit and excess. Questions to ask:
- Is downhole equipment included at all, and to what limit per event?
- Does it pay only the value of the lost tools, or also the cost of recovery attempts?
- Are there conditions about depth, ground conditions or reasonable efforts to recover?
- How does it treat gradual wear versus sudden loss?
Drilling logs recording depth, ground conditions and what happened when the string was lost are the evidence a claim will rely on. Keep them for every hole.
Transit Between Remote Sites
Truck-mounted rigs are registered vehicles, which means a motor policy and a plant policy may both be involved. Motor policies are written for road use and commonly exclude or limit damage arising from operating equipment fitted to the vehicle. The plant policy needs to pick up drilling operations, and the two need to meet without a gap.
Trailered and track-mounted rigs moved on floats need transit cover. Remote roads, creek crossings and washouts add their own risk, and recovering a rig from a remote site can cost far more than a standard towing limit allows. Check the recovery limit, and check registration and permit requirements for oversize moves in each state you work in, because they vary.
Underground Services and Contamination
Striking a gas main, fibre cable, water main or high-voltage cable can produce a claim far larger than the rig itself. Some policies apply a sublimit or a higher excess to underground services damage, or include conditions requiring service location before drilling. Keep the service location records, plans and site sign-offs for each job.
Contamination is the other exposure. Drilling fluids escaping into a waterway, cross-connecting aquifers, fuel spills and drilling on contaminated land can all lead to clean-up claims. Many liability policies exclude pollution unless it is sudden and accidental. If you work on contaminated sites or in sensitive water areas, ask exactly how your wording responds, and whether the limit meets what principals commonly ask for. Our guide to public liability limits for contractors covers how those limits are set.
Geotechnical Work and Professional Indemnity
If you only drill where you are told, liability usually centres on physical damage. If you also log, interpret or report on ground conditions, an engineer’s design may rely on your work. A mistake there can cause financial loss with no physical damage at all, which is professional indemnity territory. Our article on public liability vs professional indemnity explains the difference.
Valuing the Rig and Tooling
Replacement cost is what matters: what a comparable rig would cost today, delivered and ready to work. Imported rigs can have long lead times, and tooling stock changes through the year. An out-of-date schedule leaves you carrying part of the loss; our guide to underinsurance explains how. Review values at every renewal, and tell your broker when you add a rig or a significant quantity of tooling mid-term.
Records That Support a Claim
- Serial numbers and photos of each rig, compressor and major tooling item, stored off site.
- Purchase invoices and a current tooling inventory with values.
- Drilling logs for every hole, including depth, ground conditions and any lost string.
- Service location records and site sign-offs before drilling started.
- Maintenance and fire suppression service records.
- Operator tickets, inductions and site permits.
After a lost string, a service strike or a rig fire, these are the documents that decide how quickly the claim moves. For the full list of covers we arrange for drilling businesses, see our drillers insurance page.
Common Questions
Are rods and bits included with the rig?
Not always. Tooling is often listed separately, and downhole tools may need an extension. List what you carry, with values.
Does my truck policy apply while the rig is drilling?
Do not rely on it. Motor policies commonly exclude or limit damage from operating fitted equipment. Make sure the plant policy responds to drilling operations.
What do principals and mine sites ask for?
They commonly ask for stated liability limits, evidence of cover before mobilisation and, on mine sites, fire suppression on plant. Requirements vary by site, so check the contract.
Talk It Through
Request a quote or call 1300 983 940 and we will build cover that follows your rigs from the yard to the bottom of the hole.
General advice only. This article does not take your objectives, financial situation or needs into account. Consider the relevant PDS and Target Market Determination before deciding on a policy.