Control of Well & Redrill Cover

London upstream underwriting body the Joint Natural Resources Committee (formerly the Joint Rig Committee) has announced changes to the basis upon which its members wish to provide cover for Operator’s Extra Expense risks.

For forty years, the standard market policy form providing Operator’s Extra Expense cover has been the Energy Exploration and Development Insurance 8/86 wording (“EED 8/86”). The standard EED 8/86 policy form affords coverage in respect of Control of Well Insurance, Redrilling / Extra Expense and Seepage and Pollution, Cleanup and Contamination. In December 2025, the Joint Natural Resources Committee released an amended policy form, the Energy Exploration and Development Insurance 8/86 – revised 11/25 wording.

Historically, recognised Energy insurance commentators have noted that the introduction, in 1986, of the EED 8/86  definition of a Well Out of Control represented a desire by underwriters to avoid claims where an unintended flow occurred that could be controlled by very quickly regaining circulation through standard industry procedures. Such observations can be linked to a requirement for a fortuitous occurrence. Specifically, historic concerns existed amongst underwriters that previous coverage decisions, based on policy terminology pre-dating EED 8/86, had exposed underwriters to settlements for losses they deemed to be non-fortuitous ordinary operating costs.

Accordingly, the EED 8/86 policy form introduced expressly defined terminology prohibiting coverage if unintended flows could be “promptly” stopped, “promptly” diverted into production or circulated out or bled off through surface controls “within a reasonable period of time”. Such terminology reflecting underwriters desire for the requirement for a fortuity to have occurred, thus protecting underwriters against claims for ordinary operating costs.

The deletion of references to “promptly” and “within a reasonable period of time”, from the new 11/25 policy definition of a Well Out of Control, appears to now provide underwriters with grounds to place various previously covered fortuitous occurrences outside the scope of the revised policy wording.

Accordingly, prospective policyholders, faced with the new 11/25 policy form, may well have understandable concerns regarding a potential narrowing of coverage. Such prospective policyholders may want to seek to introduce amendatory terminology into any forthcoming insurance contracts which underwriters wish to base upon the 11/25 policy form.

Furthermore, amongst other things, prospective policyholders may also wish to clarify with underwriters the intention behind the introduction of the words “condition precedent” into the 11/95 policy form’s Due Diligence Clause. On the basis that the 11/95 policy form already retains the EED 8/86 terminology stating the Due Diligence Clause to be an exclusion, prospective policyholders may wish to satisfy themselves that there is no desire, on the part of underwriters, to reverse the onus of proof by introducing the words “condition precedent” into the new 11/95 policy Due Diligence Clause.

It is anticipated that, as always, worldwide market forces will dictate if the new 11/95 policy form becomes established and, if so, whether or not buyers will deem it wise to seek bespoke amendatory terminology within individual insurance contracts.