ALBANY, N.Y. (AP) — Nationwide Mutual Insurance Co. has become the first major insurance company to say it won't cover damage related to a gas drilling process that blasts chemical-laden water deep into the ground.

The Columbus, Ohio-based company's personal and commercial policies "were not designed to cover" risk from the drilling process, called hydraulic fracturing, or fracking, Nationwide spokeswoman Nancy Smeltzer said Thursday.

The process injects chemically treated water into wells to fracture shale thousands of feet underground and release trapped gas or oil. There are rich shale deposits in parts of Pennsylvania, New York, Ohio, West Virginia and elsewhere.

Health and environmental groups claim fracking can contaminate drinking water. The gas industry says it's safe if done properly. Nationwide said risks involved in fracking operations "are too great to ignore" and apply to policies of commercial contractors and landowners who lease property to gas companies.

The Nationwide policy first came to light when an internal memo detailing underwriting guidelines was posted on websites of upstate New York anti-fracking groups and landowner coalitions seeking gas leases. Smeltzer confirmed that the memo was genuine but said it wasn't intended for public dissemination.

The memo reads: "After months of research and discussion, we have determined that the exposures presented by hydraulic fracturing are too great to ignore. Risks involved with hydraulic fracturing are now prohibited for General Liability, Commercial Auto, Motor Truck Cargo, Auto Physical Damage and Public Auto (insurance) coverage."

It said "prohibited risks" apply to landowners who lease land for shale gas drilling and contractors involved in fracking operations, including those who haul water to and from drill sites; pipe and lumber haulers; and operators of bulldozers, dump trucks and other vehicles used in drill site preparation.

A spokesman for a research and outreach program of the Independent Petroleum Association of America, whose members drill most of the nation's oil and gas wells, said nothing in what Nationwide said represented a change in policy for the company. Simon Lomax, the research director for Energy In Depth, said insurers don't sell products specific to individual steps of the oil and gas development process.

"But practical implications aside, the fact that the company would send out a statement this reckless, and this uninformed, should tell us a lot," Lomax said in an emailed statement. "For starters, it tells me that I won't be buying home and car insurance from this company."

Opponents of fracking point to some highly publicized accidents that resulted in contamination.

In late 2010, Houston-based driller Cabot Oil & Gas Corp. settled for $4.1 million with residents of Dimock, Pa., over gas found in their water. State environmental regulators determined Cabot contaminated the aquifer underneath homes with explosive levels of methane. A Cabot spokesman said levels of contaminants found didn't pose a threat to human health or the environment.

Jeffrey Hanneman, the Texas-based director of environmental practice at the insurance broker Aon Risk Solutions, said the Nationwide move was "really unique" and he doesn't expect it will be the beginning of a trend.

"To date, all we've seen are some that were hesitant to write environmental coverage," Hanneman said. "But the Nationwide is sort of a broader ban on all the ancillary services related to it (fracking)."

Hanneman noted that there haven't been any substantial claims that targeted companies other than those that own and operate the wells or the contractors who do the drilling. And even those claims have been few and far between.

He said one factor that may be driving Nationwide's decision is that increasing publicity — much of it negative — surrounding fracking makes it possible that any damage claims would go beyond the big oil and gas companies to include the hundreds of supporting businesses such as haulers.

Mike Elmendorf, president of the general contractors' group Associated General Contractors of New York State, said the Nationwide decision was unwelcome news for his members who do work for the gas industry and was not based on facts.

With a record of shale gas development having been done safely, "it is hard to fathom the rationale for this decision," Elmendorf said. "It would seem Nationwide is not on job creation's side."

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Associated Press writer Rik Stevens contributed to this report.

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  • In this file photo from Oct. 14, 2011, a drilling rig is seen in Springville, Pa. State regulators blamed faulty gas wells drilled for leaking methane into the groundwater in nearby Dimock, Pa. It was the first serious case of methane migration said to be related to the Pennsylvania Marcellus Shale gas field drilling boom. (AP Photo/Alex Brandon, FILE)

  • British police secure the area where demonstrators erected a mock fracking rig with a banner reading 'No fracking in the UK' in a protest against hydraulic fracturing for shale gas outside the Houses of Parliament in London on December 1, 2012. AFP PHOTO / JUSTIN TALLIS

  • SPRINGVILLE, PA - JANUARY 18: A truck with the natural gas industry, one of thousands that pass through the area daily, drives through the countryside to a hydraulic fracturing site on January 18, 2012 in Springville, Pennsylvania. (Photo by Spencer Platt/Getty Images)

  • SAN FRANCISCO, CA - MAY 30: Protestors stage a demonstration against fracking in California outside of the Hiram W. Johnson State Office Building on May 30, 2013 in San Francisco, California. Dozens of protesters with the group Californians Against Fracking staged a protest outside of California Gov. Jerry Brown's San Francisco offices demanding that Gov. Brown ban fracking in the state. (Photo by Justin Sullivan/Getty Images)

  • People demonstrate on August 3, 2013 in La Petite Brosse, near Jouarre, outside Paris, to protest against an exploratory oil shale drilling, considering that it opens the door to the exploration of shale gas in the Parisian Basin. Banner reads 'Stop gas and oil shale'. AFP PHOTO / PIERRE ANDRIEU

  • In this Nov. 26, 2012 photo, Steve Lipsky demonstrates how his well water ignites when he puts a flame to the flowing well spigot outside his family's home in rural Parker County near Weatherford, Texas. The U.S. Environmental Protection Agency had evidence a gas company's drilling operation contaminated Lipsky's drinking water with explosive methane, and possibly cancer-causing chemicals, but withdrew its enforcement action, leaving the family with no useable water supply, according to a report obtained by The Associated Press. The EPA's decision to roll back its initial claim that hydraulic fracturing, or “fracking,” operations had contaminated the water is the latest case in which the federal agency initially linked drilling to water contamination and then softened its position, drawing criticism from Republicans and industry officials who insisted they proved the agency was inefficient and too quick to draw conclusions. (AP Photo/LM Otero)

  • In this file photo of Jan. 17, 2013, Yoko Ono, left, and her son Sean Lennon visit a fracking site in Franklin Forks, Pa., during a bus tour of natural-gas drilling sites in northeastern Pennsylvania. Ono and Lennon have formed a group called “Artists Against Fracking,” which has become the main celebrity driven anti-fracking organization. (AP Photo/Richard Drew, File)

  • In this March 29, 2013 file photo, a worker checks a dipstick to check water levels and temperatures in a series of tanks at a hydraulic fracturing operation at a gas drilling site outside Rifle, Colorado. (AP Photo/Brennan Linsley)

  • In this March 29, 2013 file photo, a worker switches well heads during a short pause in the water pumping phase, at the site of a natural gas hydraulic fracturing and extraction operation outside Rifle, in western Colorado. (AP Photo/Brennan Linsley)

  • In this March 29, 2013 file photo, workers tend to a well head during a hydraulic fracturing operation at a gas well outside Rifle, in western Colorado. (AP Photo/Brennan Linsley)

  • Josh Fox, director of the anti-fracking, Oscar-nominated documentary “Gasland” testifies during a House Committee hearing on oil drilling, "fracking" legislation at the Illinois State Capitol Tuesday, May 21, 2013, in Springfield, Ill. (AP Photo/Seth Perlman)

  • This is a Thursday Aug. 15, 2013 image of the Cuadrilla exploration drilling site in Balcombe, southeast England. (AP Photo/Gareth Fuller/PA)

  • A child plays near a farmers' protest in an area where oil company Chevron plans to put a drilling rig exploring for shale gas in the south-eastern Polish village of Zurawlow on June 11, 2013. AFP PHOTO / JANEK SKARZYNSKI

  • Protesters hold a banner during a protest outside of the Momentive resin plant, Monday, July 8, 2013, in Morganton, N.C. Dozens of environmental activists blocked a chemical plant Monday to protest against the company's sale of products used in the natural gas drilling process called hydraulic fracturing, or fracking. (AP Photo/The News Herald, Mary Elizabeth Robertson)

  • A fracking rig exploring for shale gas of oil company Chevron on June 11, 2013 in a village of Ksiezomierz in south-eastern Poland. AFP PHOTO / JANEK SKARZYNSKI

  • People demonstrate on August 3, 2013 in La Petite Brosse, near Jouarre, outside Paris, to protest against an exploratory oil shale drilling, considering that it opens the door to the exploration of shale gas in the Parisian Basin. AFP PHOTO / PIERRE ANDRIEU

  • Opponents of hydraulic fracturing in New York state attend a news conference and rally against hydraulic fracturing, also known as fracking, on January 11, 2012 in New York City. (Photo by Spencer Platt/Getty Images)

  • Eric Weltman of Food & Water Watch attends a news conference and rally against hydraulic fracturing, also known as fracking, in New York State on January 11, 2012 in New York City. (Photo by Spencer Platt/Getty Images)

  • Opponents and supporters of gas-drilling, or fracking, walk into the last of four public hearings on proposed fracking regulations in upstate New York on November 30, 2011 in New York City. (Photo by Spencer Platt/Getty Images)

  • Engineers on the drilling platform of the Cuadrilla shale fracking facility on October 7, 2012 in Preston, Lancashire. (Photo by Matthew Lloyd/Getty Images)

  • Engineers at work on the drilling platform of the Cuadrilla shale fracking facility on October 7, 2012 in Preston, Lancashire. (Photo by Matthew Lloyd/Getty Images)

  • General views of the Cuadrilla shale fracking facility on October 7, 2012 in Preston, Lancashire. (Photo by Matthew Lloyd/Getty Images)

  • Engineers look at the Cuadrilla shale fracking facility on October 7, 2012 in Preston, Lancashire. (Photo by Matthew Lloyd/Getty Images)

  • A lump of shale rock on display at the Cuadrilla shale fracking facility on October 7, 2012 in Preston, Lancashire. (Photo by Matthew Lloyd/Getty Images)

  • Engineers on the drilling platform of the Cuadrilla shale fracking facility on October 7, 2012 in Preston, Lancashire. (Photo by Matthew Lloyd/Getty Images)

  • Engineers at work on the drilling platform of the Cuadrilla shale fracking facility on October 7, 2012 in Preston, Lancashire. (Photo by Matthew Lloyd/Getty Images)

  • Drill heads on display at the entrance to the Cuadrilla shale fracking facility on October 7, 2012 in Preston, Lancashire. (Photo by Matthew Lloyd/Getty Images)

  • An engineer displays a lump of shale rock at the Cuadrilla shale fracking facility on October 7, 2012 in Preston, Lancashire. (Photo by Matthew Lloyd/Getty Images)

  • Actor/director Mark Ruffalo (C) speaks at the Hydraulic Fracturing prevention press conference urging the protection of the drinking water source of 15 million Americans at Foley Square on April 25, 2011 in New York City. (Photo by D Dipasupil/Getty Images)

  • (L-R) Actor/director Mark Ruffalo, Denise Katzman, Wenonah Hauter, and Water Defense co-founder/campaign director Claire Sandberg attend the Hydraulic Fracturing prevention press conference urging the protection of the drinking water source of 15 million Americans at Foley Square on April 25, 2011 in New York City. (Photo by D Dipasupil/Getty Images)