Insurance implications of fracking

Hydraulic fracturing (fracking) has been used in the UK for years, but the scale and the techniques used are changing now that the government has said it will support it at policy level. Large-scale fracking could be rolled out across the UK in the near future and while there are regulations in place to ensure it is as safe as it can be, insurers must consider the potential risks any increase in activity could bring.

This report identifies and examines a number of key perils associated with fracking such as earthquakes, explosions and fire, pollution, injury and death. While cover for these risks are included in most insurance policies, fracking will pose additional complications around liability. Widespread fracking may also lead to increased claims frequency near fracking sites and then insurers may have to consider how they underwrite this emerging higher-risk group.