Insurance Clause Example for Offshore Contracts

X. INSURANCE

X.1 Contractor's Insurances

Contractor at its own cost and expense shall obtain the following insurance policies with policy limits as indicated hereunder and which Contractor shall maintain or cause to be maintained in full force and effect throughout the duration of the Contract.

a) Workmen's Compensation Insurance
Workmen's Compensation Insurance which shall provide benefits at least equal to those required by the law of the place of hire for any expatriate personnel, and

which shall provide benefits at least equal to those required by the law of the place where any work under this Contract is being conducted; and
which shall provide occupational disease coverage where required; and
employer's liability coverage shall be such an amount as is required by applicable statute or if no statutory requirement exist the minimum limit shall be US$100,000 (one hundred thousand United States dollars) per person and US$100,000 (one hundred thousand United States dollars) per accident.

b) General Liability Insurance
General Liability Insurance covering premises, operations, contractual liability and marine operations. This insurance shall cover all operations of Contractor required for the performance of the Work under this Contract with a limit of not less than US$20,000,000 (twenty million United States dollars) for any one occurrence.

c) Protection and Indemnity Insurance
Protection and Indemnity Insurance covering loss of life, personal medical and repatriation expenses, property loss or damage with a member of the International Group of P&I clubs. All vessels whether owned, chartered or hired shall be covered.

d) Hull and Machinery Insurance
Hull and Machinery Insurance for all marine units owned and/or operated and/or hired by Contractor to the declared value of the units, including full collision liability with the sister ship clause unamended and liability for removal of wreck. Where the vessels engage in towing operations the insurance shall include tower's liability with the sister ship clause unamended.
Above collision liability may alternatively be provided through the Protection and Indemnity insurance. The policy amount shall not be less than US$25,000,000 (twenty five million United States dollars) for the HLV.

X.2 Conditions of Contractor's Insurance

The policies under Article [ref X.1] shall be placed by Contractor subject to the following conditions:

Notwithstanding the said policy limits, the Contractor shall indemnify and protect the Company to the extent indicated in Contract as Contractor's liability. All deductibles applicable to the foregoing insurance shall be for the account of Contractor. Contractor shall furnish Company with certificates setting forth the insurance coverage, evidencing that they comply with provisions stated herein, warranting further that the insurer shall not let policies lapse or their guarantee be reduced without thirty days prior written notice to Company and Company's written consent.

The insolvency, liquidation, bankruptcy, or failure of any insurance company providing insurance for Contractor, or failure of any such insurance company to pay claims accruing shall not be held to waive any of the provisions of this Contract.

X.3 Company's Insurances

Company at its own cost and expense shall obtain the following insurance policies with policy limits as indicated hereunder and which Company shall maintain or cause to be maintained in full force and effect throughout the duration of the Contract

a) Workmen's Compensation Insurance
Workmen's Compensation Insurance which shall provide benefits at least equal to those required by the law of the place of hire for any expatriate personnel, and

which shall provide benefits at least equal to those required by the law of the place where any work under this Contract is being conducted; and
which shall provide occupational disease coverage where required; and
employee's liability coverage shall be such an amount as is required by applicable statute or if no statutory requirement exist the minimum limit shall be US$100,000 (one hundred thousand United States dollars) per person and US$100,000 (one hundred thousand United States dollars) per accident.

b) General Liability Insurance
General Liability Insurance covering premises, operations, contractual liability and marine operations. This insurance shall cover all operations of Company Group related to this Contract with a limit of not less than US$20,000,000 (twenty million United States dollars) for any one occurrence.

c) Protection and Indemnity Insurance [HOLD - only applicable in the event Company provides marine units]
Protection and Indemnity Insurance covering loss of life, personal medical and repatriation expenses, property loss or damage. This policy shall cover all vessels whether owned, chartered or hired. The minimum policy limit shall not be less than US$15,000,000 (fifteen million United States dollars)

d) Hull and Machinery Insurance [HOLD - only applicable in the event Company provides marine units]
Hull and Machinery Insurance for all marine units owned and/or operated and/or hired by Company to the full value of the units, including full collision liability with the sister ship clause unamended and liability for removal of wreck. Where the vessels engage in towing operations the insurance shall include tower's liability with the sister ship clause unamended. Above collision liability may alternatively be provided through the Protection and Indemnity insurance.

e) Marine Insurance
Marine Insurance covering all shipments including but not limited to materials, parts, fabrications, and equipment, related to the Work.

f) CAR Insurance
Construction All Risk (CAR) insurance policy providing full cover for any damage, loss or standby that may be incurred by Company and/or Contractor Indemnitees in relation to the damage or loss of the Permanent Works or part thereof, including but not necessarily limited to the cost of repair of the Permanent Works, repair of Existing Facilities and standby of Contractor's Marine Spread at the daily rate for standby provided in the Contract, all irrespective of cause including but not necessarily limited to negligence.

Company's CAR insurance policy shall list Contractor Indemnitees as co-insured and shall contain appropriate waivers of subrogation in favour of Contractor Indemnitees.

Company's CAR insurance policy shall be valid and shall provide full cover for the full duration of the Contract including any applicable warranty period.

Without prejudice to the indemnity provisions of the Contract, Contractor shall take due care in handling the Permanent Works during offshore [transportation and - tba] installation and in the event of loss of or damage to the Permanent Works caused by reasons solely attributable to Contractor, Contractor shall be liable for the cost of repair, replacement and/or standby up to an amount equal to the deductible under Company's CAR insurance, subject to a maximum of US$100,000 (one hundred thousand United States Dollars) per event or series of events emanating from the same cause.

X.4 Conditions of Company's Insurance

The policies under Article [ref X.3] shall be placed by Company subject to the following conditions:

Notwithstanding the said policy limits, Company shall indemnify and protect Contractor to the extent indicated in the Contract as Company's liability. All deductibles applicable to the foregoing insurance shall be for the account of Company. Company shall furnish Contractor with certificates setting forth the insurance coverage, evidencing that they comply with provisions stated herein, warranting further that the insurer shall not let policies lapse or their guarantee be reduced without thirty days prior written notice to Contractor and Contractor's written consent.

The insolvency, liquidation, bankruptcy, or failure of any insurance company providing insurance for Company, or failure of any such insurance company to pay claims accruing shall not be held to waive any of the provisions of this Contract.

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Insurance Clause Example