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MarketsOpinionsDrilling Business InsightsMining & Mineral Exploration DrillingWater WellsPipeline

Protect You, Your Drilling Business by Asking ‘What If?’

From Accidents to Lawsuits, Play out Scenarios and Prepare

By David King
contingency planning for accidents

Accidents and other unfortunate, potentially costly events happen. What’s the plan if it’s you in the car? Your star driller? Ask yourself “what if?” to start developing your contingencies.

Source: Getty Images

January 24, 2023

Within a three-week span this past August, our car broke down and remained stuck in the parking lot of the local grocery, I totaled our other vehicle, my laptop’s display went dark and my wife’s laptop had its display cracked by a cat. Months later, the only thing that has been resolved is that we bought a used truck. We continue to limp along with our computer situation, looking for a sales event to pop up.

While inconvenient, had all these calamities happed while I still worked, it would have been much worse. Before retiring, we needed two vehicles. My wife, Randy, worked and I would need to run to our pipe yard or travel to jobsites. We would have needed to replace at least one of the computers ASAP then, too. That would be a major expense and a hit to our business. Most of us have a plan in place to handle one unfortunate event at a time, but likely not a string of them.

We periodically play the “what if” game. Think about what you would do if a bad thing happened. What if your best driller suffers an injury, has a lengthy illness or decides to work elsewhere? What if you roll your rig amid an extensive work backlog? What if you get hit by a bus?

Sure, your rig is insured. But how do you fill the void in your day-to-day operations without it? Rig repairs can take time and to replace it can required lots more than just the insurance money. When I totaled my 2000 pickup, insurance money was hardly enough to replace it, even with a used one. My insurance gave us a rental car. Do rig policies include coverage for a rental rig? What do you do with the trashed rig’s crew while waiting for repairs?

Since we cannot reasonably have a spare for everything, what measures can we take to help ease the downsides when one or more of these “what ifs” happen?

Since we cannot reasonably have a spare for everything, what measures can we take to help ease the downsides when one or more of these “what ifs” happen?

Explore the possibilities periodically. When I was manufacturing drill pipe, we had one primary saw used to cut steel bars and tubes for our production needs. It was fast and could be automated to cut 100 pieces of alloy bar with the only real need being to load those bars when needed. We had other saws, but they were slow, antiquated hacksaws unable to meet the demand.

We considered buying another saw, so a breakdown would not be debilitating to our production. Instead, I kept tabs with a machinery distributor to make sure there was one available from stock that I could get delivered the next day if we could not fix the existing saw.

As another example, our major CNC turning centers would occasionally break down due to controller issues. We would need to figure out which computer board failed and get a replacement. Speaking with our CNC manager, I learned that the controller had just five boards. To avoid downtime due to board issues, we purchased backups of all five boards and could use them in any of our machines that ran the same controller. Board issue? Just switch out the boards until we found the bad one and we were back running.

Sometimes, we can develop good, relatively inexpensive and quick solutions to our “what if” scenarios. Insurance comes to mind there, but payouts on claims often fail to cover all expenses related to those claims. That means decisions will need to be made. An annual insurance review may help you identify those uninsured or underinsured risks.

Protect yourself from lawsuits. Make sure to include this aspect during your insurance review. Keep written records of conversations with clients (like emails). Many business owners protect their personal properties, like homes, through incorporating. Make sure all paperwork is done through the corporation name. Having a written contract can help. Fighting a lawsuit can prove time-consuming and expensive. Going before a judge or jury is never a sure thing, especially when it involves technical issues. I also suggest running your procedures, documentation and insurance policies by your attorney for their opinion and advice.

Playing the “what if” game can have you mentally prepared to make better decisions if — and when — those traumatic events occur. Good relationships between you, your insurance agent and your lawyer can help bring some peace of mind and protection for your company and family.

See more articles from our February issue!

KEYWORDS: drill pipe

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David king

David King has decades of expertise in drill pipe manufacturing and retired as president and owner of Kingsland Drill International, a drill pipe and accessories supplier based in Mercersburg, Pa. For more information, call 717-328-9256.

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