In recent months, there have been news reports, and even a documentary or two exposing concerns and the possible dangers of “fracking” activities. This is due in part to the rumblings about the expected flood of litigation created by the energy industry’s increased use of fracking in the production and recovery of oil and gas.

While litigation is a huge talking point, though, only a few actual suits have been filed. Moreover, this risk is one that should be carefully considered by the insurance industry and how it may affect your Pennsylvania homeowners insurance policies.

What exactly is fracking?

Hydraulic Fracking is a technology developed by the energy industry that allows energy producers to extract oil from places where, in the past, it was either too expensive or too difficult to otherwise retrieve. It’s a technology used to extract natural gas, and oil, that lies within a shale rock formation thousands of feet beneath the earth’s surface. Now that fracking is being are doing in some states, including Pennsylvania, there are exposures and risks should an accident occur. As we know from several widespread environmental cleanup cases of the last several decades, for instance, the BP oil spill, defense costs in connection with these types of lawsuits can easily run into the millions of dollars, and are often greater than the actual indemnity risk. Consequently, the initial issue, regardless of the risk of liability, will be the duty to defend those suits.

Do Pennsylvania homeowners insurance cover claims resulting from fracking?

This is a significant area of concern and one you should get answers to. Are property insurance claims by homeowners affected by fracking activities? In addition to potential groundwater contamination leading to bodily injury claims, some homeowners may suffer various forms of subsidence or well water contamination.

While your insurance policy provides coverage for your home and other property structures for direct physical loss or damage to the property during the policy period, it may exclude events such as contamination of land or water serving residents, as well as settling, cracking, shrinking or other types of harm that may be alleged by homeowners near fracking sites. Be sure to speak to a reputable insurance agent about any questions or concerns that you may have.