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Offshore Construction Contracting Principles

Third Party Indemnities

Principles

It is recommended that the following principles be applied in relation to Third Party indemnities for personnel and property under offshore construction contracts:

At the Site

For the purpose of liabilities and indemnities, any personnel or property at the Site such as platforms, pipelines, quaysides, vessels and rigs, but excluding any Contractor Group personnel or property, shall be considered Company Group property.

Company shall indemnify Contractor Group for Third Party claims in respect of loss or damage to Third Party property and/or death or injury of Third Party personnel on the offshore Site, whether caused by Contractor or otherwise.

Off the Site

Each respective Party shall indemnify the other Party Group for Third Party claims in respect of loss or damages to any Third Party property and/or death or injury of any Third Party personnel outside the offshore Site and caused by such indemnifying Party.


Clarifications / Considerations

Whereas a marine contractor goes from project to project, and will always remain no more than a temporary guest at an operator's offshore Site, the operator is permanently "at home" at the offshore Site and therefore should be in a much better position to be aware of any aspects or features related thereto, including but not necessarily limited to any and all personnel and property being present at its offshore Site.

It should therefore be no more than reasonable for Company to assume responsibility for any and all personnel and property at its offshore Site other than Contractor's, and to indemnify Contractor accordingly.

The same principle is valid for the fabrication / load out location.

Notes:

The following contract principles are related to the fact that Company is permanently "at home" at the offshore Site and the fabrication / load out location:

  • Company shall guarantee Contractor free and unencumbered access to the Work;
  • Contractor shall execute the Work in reliance of Company provided information.

Example Clause

The following is an example of a Third Party Indemnity Clause containing the above contracting principles.

X. THIRD PARTY INDEMNITIES

X.1 At the Site

Company shall indemnify and hold Contractor Group free and harmless from and against any and all claims, losses, costs, delays, standby, demands, damages, suits, judgements, penalties, liabilities, debts, expenses and causes of action and every other claim or litigation (including all costs thereof and attorneys' fees) for bodily injury, illness, disease, or death to any Third Party personnel and/or loss of or damage to any Third Party property and/or for any and all other loss, damage or delay sustained by any Third Party which may in any manner arise from, grow out of, or be incidental to the Work, whether or not such has been caused or contributed to by the fault or negligence of any of Contractor Group, including the sole negligence but excluding the gross negligence or wilful misconduct of Contractor Group, provided that the event or incident giving rise to such losses, delays, claims, demands, suits, liabilities, actions and/or expenses has taken place

  • within a five hundred (500) metre radius of Company's fabricator facilities; and/or
  • within a seventeen hundred and fifty (1,750) metre radius of the offshore Site; and/or
  • within a seventeen hundred and fifty (1,750) metre radius of any working barge or vessel which is at the time directly engaged in the Work but not when performing other operations not forming part of the Work, and not during mobilization or demobilization of such working barge or vessel.

X.2 Off the Site

Contractor shall indemnify and hold Company Group free and harmless from and against any and all claims, losses, costs, delays, standby, demands, damages, suits, judgements, penalties, liabilities, debts, expenses and causes of action and every other claim or litigation (including all costs thereof and attorneys' fees) for bodily injury, illness, disease, or death to any Third Party personnel and/or loss of or damage to any Third Party property and/or for any and all other loss, damage or delay sustained by any Third Party which may in any manner arise from, grow out of, or be incidental to the Work and which is caused or contributed to by the fault or negligence of any party or person in Contractor Group, provided that the event or incident giving rise to such losses, delays, claims, demands, suits, liabilities, actions and/or expenses has taken place

  • outside a five hundred (500) metre radius of Company's fabricator facilities; and/or
  • outside a seventeen hundred and fifty (1,750) metre radius of the offshore Site; and/or
  • outside a seventeen hundred and fifty (1,750) metre radius of any working barge or vessel which is at the time directly engaged in the Work but not when performing other operations not forming part of the Work, and not during mobilization or demobilization of such working barge or vessel.

Company shall indemnify and hold Contractor Group free and harmless from and against any and all claims, losses, costs, delays, standby, demands, damages, suits, judgements, penalties, liabilities, debts, expenses and causes of action and every other claim or litigation (including all costs thereof and attorneys' fees) for bodily injury, illness, disease, or death to any Third Party personnel and/or loss of or damage to any Third Party property and/or for any and all other loss, damage or delay sustained by any Third Party which may in any manner arise from, grow out of, or be incidental to the Work and which is caused or contributed to by the fault or negligence of any party or person in Company Group, provided that the event or incident giving rise to such losses, delays, claims, demands, suits, liabilities, actions and/or expenses has taken place

  • outside a five hundred (500) metre radius of Company's fabricator facilities; and/or
  • outside a seventeen hundred and fifty (1,750) metre radius of the offshore Site; and/or
  • outside a seventeen hundred and fifty (1,750) metre radius of any working barge or vessel which is at the time directly engaged in the Work but not when performing other operations not forming part of the Work, and not during mobilization or demobilization of such working barge or vessel.