§ 8-253. Insurance and indemnification.

(a)

Required. 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. The operator may provide the required coverage on a "blanket basis" for multiple wells. The city manager shall have the authority to approve such coverage.

(b)

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 of Fate, its elected and appointed officials, 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, and shall fully defend, protect, indemnify, and hold harmless the City of Fate, Texas, and/or its elected and appointed officials, 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 of Fate, Texas, its elected and appointed officials, 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 of Fate, Texas, its elected and appointed officials, 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, its elected and appointed officials, officers, agents, servants, or employees, created by, or arising out of the acts or omissions of the City of Fate 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 of Fate 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 of Fate, Texas, its elected and appointed officials, agents, officers, servants, or employees from the consequences of the negligence of the City of Fate, Texas, its elected and appointed officials, 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 canceled 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 ten days' advance written notice is required.

(3)

Liability policies shall be written by carriers licensed to do business in the state and with companies with A: VIII or better rating in accordance with the current Best Key Rating Guide, or with non-admitted carriers that have a financial rating comparable to carriers licensed to do business in the state and approved by the city.

(4)

Liability policies shall name as "additional insured" the City of Fate, its elected and appointed officials, agents and employees.

(5)

Certificates of insurance must be presented to the city evidencing all coverages and endorsements required by this section and the acceptance of a certificate without the required limits and/or coverages 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 article.

(c)

Required insurance coverages.

(1)

Commercial general liability insurance.

a.

Coverage should be a minimum combined single limit of $1,000,000.00 per occurrence for bodily injury and property damage. This coverage must include premises, operations, blowout, explosion products, completed operations, blanket contractual liability, underground property damage, broad form property damage, independent contractors protective liability, and personal injury.

b.

Environmental impairment (or seepage and pollution) shall be either included in the coverage or written as separate coverage. Such coverage shall not exclude damage to the lease site. If environmental impairment (or seepage and pollution) coverage is written on a "claims-made" basis, the policy must provide that any retroactive date applicable precedes the effective date of the issuance of the permit. Coverage shall apply to sudden and non-sudden pollution conditions resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids, or gases, waste material or other irritants, contaminants or pollutants. Coverage shall be a minimum combined single limit of $1,000,000.00 per occurrence.

(2)

Automobile liability insurance. Minimum combined single limit of $500,000.00 per occurrence for bodily injury and property damage. Such coverage shall include owned, non-owned, and hired vehicles.

(3)

Worker's compensation insurance. To meet the statutory requirements in the state.

(4)

Excess (or umbrella) liability insurance. Minimum limit of $10,000,000.00 covering in excess of the preceding insurance policies.

(5)

Control of well insurance.

a.

Minimum limit of $5,000,000.00 per occurrence.

b.

Policy shall cover the cost of controlling a well that is out of control, redrilling or restoration expenses, and seepage and pollution damage. Damage to property in the operator's care, custody, and control with a sublimit of $500,000.00 may be added.

(Ord. No. O-1008, § 4(1.5), 2-3-2003)