Tag Archives: regulations

Hydraulic Fracking

The term “hydraulic fracking” is used to describe a drilling method. Quantities of water, chemicals and sand are injected into gas-producing shale rock beds.

The natural gas is trapped inside the shale rock. Pressure produced by this technique creates small cracks in the surrounding rock. Thus the natural occurring gas is released and captured. After the capture, waste water is released.

Environmental concerns

Hydraulic fracking has gained positive and negative attention over the past few years. This drilling method is highly contentious.  This is due mainly to environmental concerns. Methane gas is released.  It is dangerous because poses possible air and water pollution risks.

The amount of water used places strain on water supplies, especially in drought-stricken areas. Potential hazards include induced earthquakes as well as operational failures and traffic congestion.

Drilling operators should have the proper insurance coverage. Most drilling companies carry commercial general liability. This is protection against third-party bodily injury as well as property damage claims. Also carried by operators is extra expense liability coverage. This insures against well failures and closures.


Homeowners exposed to risks from fracking should be aware of coverage limitations. There are also exclusions in their homeowners insurance policy. Such policies exclude settling, cracking and shrinking. Pollution exclusions are also common in homeowners policies. These policies do not cover damage incurred by seismic activity. As a result,  individuals exposed to this risk should purchase earthquake specific cover.

Complicating matters, regulations over hydraulic fracking operators differ widely among the states.

Some U.S. Insurers have started excluding fracking activities from their policies because of pricing difficulties.

The rapid expansion of hydraulic fracking operations in the U. S. brings the need for insurance solutions.

Major global reinsurers, which traditionally pick up substantial parts of insurance exposure, remain unwilling to take on hydraulic fracking. The insurers and reinsurers are reluctant to participate if they can’t understand the risk. If they can’t understand the risk, they can’t price it. If an insurer can’t measure and quantify that, the choice would be to stay out of the business altogether.

Robot insurance

Finding cost-effective robot insurance can be a difficult process.

Scott Eckert, CEO of Rethink Robotics thus suggests ways to obtain affordable robot insurance.

Understand the Difference

Insurance companies need to understand the difference between a traditional robot and the latest models.  Older robots are not able to analyse the environment.  This means high risk. Traditional industrial robots have to be cage-protected.  However, the latest robots are sensor driven.

Rethink Robotics created Baxter, a robot designed for use with human workers. Insurance agents were invited to a demonstration of Baxter at work.  He functioned alongside human co-workers. Baxter has human detection capabilities. Furthermore, he is also able to sense possible collisions in the workplace.

As a result of this demonstration, Rethink Robotics was able to therefore obtain secure,  liability insurance protection.


Robotic makers and insurers should work together and thereby develop regulations for the industry. By developing rules, the industry will exercise certain risk management principles. The consequence is that the stricter the regulations, the cheaper the insurance premiums will be.

Risk Assessment

The evaluation of a risk depends on its frequency and severity. Thus assessing risks for robot insurance is difficult.
Robot insurance risk estimates are challenging due to: –

* the technical intricacy of these devices;
* insufficient data regarding risks and accidents;
* the unpredictability regarding liabilities of the manufacturer and end-user of robots.

Robot manufacturers have experienced problems obtaining robot insurance. A Europe-based company told Robotics Business Review that as a result, a project designed to test a humanoid robot in an urban environment had to be abandoned.

Certain insurance companies have voiced concerns about the size and type of risk a malfunctioning autonomous robot could pose. The result would be damage to property and hence people in an urban setting.

In conclusion, more and more robots will be in our work and home environments in the future.  These machines are going to present challenges for insurers in spite of efforts by designers and safety experts.