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Offshore Construction Contracting Principles

Insurance Coverage

Principles

It is recommended that the following principles be applied in relation to the insurance provisions under offshore construction contracts:

  • In principle (assuming that Contractor is a well established and prudent contractor) insurance coverage as carried by Contractor shall be deemed to be sufficient.
    Contractor's insurances shall include Company Group as (protective) co-insured with appropriate Waivers of Subrogation.

  • Insurance coverage carried by Company shall be at least equal to insurance coverage as carried by Contractor and
    Company's insurances shall include Contractor Group as (protective) co-insured with appropriate Waivers of Subrogation.

  • Both Parties shall make typical insurance certificates available for review by the other Party if so requested.

  • A proper CAR insurance shall be provided by Company and shall include Contractor Group as co-insured with appropriate Waivers of Subrogation.


Clarifications / Considerations

Regarding "insurance coverage as carried by Contractor shall be deemed to be sufficient":
If Contractor is a well estabished and prudent contractor, it will conduct its year-in-year-out business under a fixed and solid set of insurance policies and coverage, and Contractor should be able to obtain such set of policies at economical rates.
As such there should be no need to adapt this existing set of insurance policies and coverage to suit one particular Client's preferences, especially since such requested additional policy or coverage will be less economical to obtain or may be impossible to obtain for just one Project which may last no more than a couple of days or weeks.

Regarding "Insurance coverage carried by Company shall be at least equal to insurance coverage as carried by Contractor ":
It goes without saying that if one Party is to provide a certain insurance policy and coverage, the other Party shall provide the same. For example, if Contractor's personnel or tugs are to be insured with a certain coverage, Company's personnel or tugs shall be equally insured and covered.

Regarding "CAR insurance shall be by Company ":
Since the CAR insurance shall cover Company's entire project, of which Contractor's operations form only a part, it is only logical, and the most economical, that Company provides the CAR policy.

General:
The naming of the other Party as (protective) co-insured and the provision of appropriate Waivers of Subrogation are absolute requirements in order to protect the effectivity of the Knock for Knock Indemnity.