The Exxon Texas Case: Lessons Learned in Comprehensive Risk Management

September 5, 2023

The Exxon Texas case shows how a lack of precise insurance and risk transfer requirements led to costly consequences. The supposed insurance requirements were vague and imprecise, making it difficult to enforce them effectively. This failure to ensure precise requirements ultimately resulted in a major loss, with two deaths caused by one of Exxon’s contractors, for which coverage was denied by the third-party contractor’s insurance carrier.

What Happened at Exxon Texas?

Despite believing they had transferred the risk and verified the coverage, Exxon faced a nine-year legal battle and incurred millions in expenses. The root cause was the imprecise language and requirements, and failure to unambiguously transfer and activate the necessary risk coverage. If Exxon had implemented clear and concise risk transfer requirements, they could have saved both time and money in this $24 million case.

While the initial layer of policies covered a portion of the expenses, issues arose with the excess policies, which often lack standardization compared to primary policies. If the language in these excess policies is not specific and properly verified, problems can occur. This is where our system stands out, utilizing the precise language necessary to trigger coverage. Exxon’s ordeal could have been avoided if they had employed the correct wording in their risk transfer requirements.

It’s essential for all businesses, regardless of size or industry reputation, to heed this valuable lesson from the Exxon case. The importance of using precise, triggering language in insurance requirements cannot be overstated. Clear and specific language ensures proper activation of coverage, especially in third-party scenarios. Our system excels in identifying and addressing potential problems in these crucial areas.

This case serves as a clear example of why you should practice risk transfer. By doing so, you can avoid the costly legal battles and (millions of dollars spent by Exxon) in pursuing their contractor’s excess insurance carrier to pay the claim.

Exxon failed to ensure a clear and explicit insurance contract that would have triggered the third-party insurance coverage, saving them from litigation, expenses, and complications.

How Can COI Tracking Save Millions?


Did you know that a majority of third-party insurance policies go unverified, putting individuals at risk of limited or nonexistent coverage?

Exxon certainly did not know.

Evident provides thorough verification and protection for policyholders from unexpected coverage gaps.

And it’s not just about third-party coverage. By reducing risk and showcasing proactive risk management, businesses can enjoy reduced premiums on their own insurance policies. Save up to 15% annually with a well-documented and verified risk profile.

Say goodbye to manual methods that drain your time and resources. Our simplified and automated system drastically reduces labor costs and streamlines your workflow. The efficiency is unmatched, making it a worthy investment for any business.

Experience the savings and efficiency of our COI tracking and monitoring solution. Let automation unlock your potential.

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