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blowout and cratering

In the oil and gas production industry, blowout and cratering refers to uncontrolled eruption of oil, gas, water, or drilling fluid from a well that is in the process of being drilled (blowout) or to the caving in of a well that has already been drilled.

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Blowouts are generally caused by the penetration of a reservoir that contains gas or oil that is under higher pressure than has been allowed for; often, the oil or gas catches fire. When a well craters, often the drilling rig itself goes under with the well. Coverage for the insured's liability for damage to property of others caused by blowout or cratering is optional in the commercial general liability (CGL) policy. A specialty coverage—control-of-well insurance—provides coverage for the expenses of bringing a blowout under control, cleaning up any resulting pollution, and damage to the property of the operator.