The GasFields Commission Queensland (GFCQ) has announced a new insurance clause related to coal seam gas (CSG) a year after IAG confirmed it would no longer provide public liability insurance to landholders who hosted CSG wells and infrastructure.
GFCQ said the new clause would help clarify insurance concerns, particularly uncertainty about risk and liability.
“What it means is that landholders who host gas activities, including infrastructure on their properties, will be able to continue to access general insurance policies for farm risk,” said Warwick Squire, the acting chief executive officer of GFCQ, as reported by ABC.
Squire explained that the new indemnity clause could be introduced as an amendment to existing agreements between gas companies and landholders, protecting them from any public liability exposure risk related to CSG activity.
Toowoomba insurance broker Jason Johnston, who was involved in the new clause’s negotiation, warned that landholders could face additional legal fees.
“It’s going to come at cost for a legal representative to put this transaction in place,” he said, as reported by ABC.
However, GFCQ clarified that laws require gas companies to cover costs to landholders relating to resource activity.
“The landholder should not be out of pocket as a result of any new negotiations associated with this clause,” Squire said.
Andrew McConville, the chief executive of the Australian Petroleum Production and Exploration Association (APPEA), added: “Gas companies must reimburse landholders for reasonable and necessary legal advice costs incurred in negotiating land access agreements.”
GFCQ said it continues to find a solution for addressing long-term risk after gas development ends as some landholders were concerned that the clause was only effective while gas companies were operational.
Meanwhile, APPEA is working with peak farming bodies, insurers, and the Queensland government to clarify arrangements post-gas development to address future risk. It also confirmed that the Insurance Council of Australia (ICA) welcomes the new clause on behalf of the broader industry.
“The clause is being used by some APPEA members for new land access agreements. The clause may also be applied to existing agreements if required by the insurer and agreed to by the landholder and proponent,” McConville said.
