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The operator shall provide or cause to be provided the insurance described below for each well for which an oil or gas well permit is issued, such insurance to continue until the well is abandoned and the site restored. Such coverage shall be approved by the City Council.
(A) General requirements; indemnification and express negligence provisions.
(1) Each oil or gas well permit issued by the city shall include the following language: Operator does hereby expressly release and discharge, all claims, demands, actions, judgments, and executions which it ever had, or now have or may have, or assigns may have, or claim to have, against the city, and/or its departments, it agents, officers, servants, successors, assigns, sponsors, volunteers, or employees, created by, or arising out of personal injuries, known or unknown, and injuries to property, real or personal, or in any way incidental to or in connection with the performance of the work performed by the operator under an oil or gas well permit and the operator caused by or arising out of, that sequence of events which occur from the operator under the oil or gas well permit and work performed by the operator shall fully defend, protect, indemnify, and hold harmless the city, and/or its departments, agents, officers, servants, employees, successors, assigns, sponsors, or volunteers from and against each and every claim, demand, or cause of action and any and all liability, damages, obligations, judgments, losses, fines, penalties, costs, fees, and expenses incurred in defense of the city, and/or its departments, agents, officers, servants, or employees, including, without limitation, personal injuries and death in connection therewith which may be made or asserted by operator, its agents, assigns, or any third parties on account of, arising out of, or in any way incidental to or in connection with the performance of the work performed by the operator under an oil or gas well permit and, the operator agrees to indemnify and hold harmless the city, and/or its departments, and/or its officers, agents, servants, employees, successors, assigns, sponsors, or volunteers from any liabilities or damages suffered as a result of claims, demands, costs, or judgments against the city and/or, its departments, it's officers, agents, servants, or employees, created by, or arising out of the acts or omissions of the city occurring on the drill site or operation site in the course and scope of inspecting and permitting the oil or gas wells including, but not limited to, claims and damages arising in whole or in part from the sole negligence of the city occurring on the drill site or operation site in the course and scope of inspecting and permitting the oil or gas wells. It is understood and agreed that the indemnity provided for in this section is an indemnity extended by the operator to indemnify and protect the city, and/or its departments, agents, officers, servants, or employees from the consequences of the negligence of the city, and/or its departments, agents, officers, servants, or employees, whether that negligence is the sole or contributing cause of the resultant injury, death, and/or damage. Liability for the sole negligence of the city in the course and scope of its duty to inspect and permit the oil or gas well is limited to the maximum amount of recovery under the Tort Claims Act.
(2) All policies shall be endorsed to read "this policy will not be cancelled or non-renewed without 30 days advanced written notice to the owner and the City except when this policy is being cancelled for nonpayment of premium, in which case 10 days advance written notice is required."
(3) Liability policies shall be written by carriers licensed to do business in Texas and with companies rated A+ or better by A.M. Best, or with non-admitted carriers that have a financial rating comparable to carriers licensed to do business in Texas approved by the city. The A+ rating by A.M. Best shall be maintained for the policy period.
(4) Liability policies shall name as "additional insured" the city and its officials, agents, employees, and volunteers.
(5) Certificates of insurance must be presented to the city evidencing all coverage's and endorsements required by this chapter, and the acceptance of a certificate without the required limits and/or coverage's shall not be deemed a waiver of these requirements.
(6) Claims made policies will not be accepted except for excess policies or unless otherwise provided by this chapter.
(B) Required insurance coverage's.
(1) Commercial general liability insurance.
(a) Coverage should be a minimum combined single limit of $1,000,000 per occurrence for bodily injury and property damage. This coverage must include premises, operations, blowout or explosion, products, completed operations, blanket contractual liability, underground property damage, broad form property damage, independent contractors protective liability and personal injury.
(b) Environmental pollution liability coverage.
1. Operator shall purchase and maintain in force for the duration of the oil or gas well permit insurance for environmental pollution liability applicable to bodily injury, property damage, including loss of use of that damaged property or of property that has not been physically injured or destroyed; cleanup costs; and defense, including costs and expenses incurred in the investigation, defense or settlement of claims; all in connection with a loss arising from the insured site. Coverage shall be maintained in an amount of at least $1,000,000 per loss, with an annual aggregate of at least $10,000,000.
2. Coverage shall apply to sudden and accidental pollution conditions resulting from escape or release of smoke vapors, fumes, acids, alkalis, toxic chemicals, liquids or gasses, waste material or other irritants, contaminants or pollutants.
3. The operator shall maintain continuous coverage and shall purchase extended coverage period insurance when necessary. The extended coverage period insurance must provide that any retroactive date applicable to coverage under the policy precedes the effective date of the issuance of the permit by the city.
(2) Automobile liability insurance. Minimum combined single limit of $500,000 per occurrence for bodily injury and property damage. Such coverage shall include owned, non-owned, and hired vehicles.
(3) Worker's compensation insurance. In addition to the minimum statutory requirements, coverage shall include employer's liability limits of at least $100,000 for each accident, $100,000 for each employee, and a $500,000 policy limit for occupational disease, and the insurer agrees to waive rights of subrogation against the city, its officials, agents, employees, and volunteers for any work performed for the city by the operator.
(4) Excess (or umbrella) liability insurance. Minimum limit of $10,000,000 covering in excess of the preceding insurance policies.
(5) Control of well insurance.
(a) Minimum limit of $5,000,000 per occurrence.
(b) Policy shall cover the cost of controlling a well that is out of control, re-drilling or restoration expenses, seepage and pollution damage. Damage to property in the operator's care, custody, and control with a sub-limit of $500,000 may be added.
(Ord. 618, passed 3-20-2006) Penalty, see § 155.99