ABSTRACT
Offshore oil and gas projects are subject to a number of risks that are unique. Offshore construction Contracts typically allocate the risks to the parties in different ways to the ‘usual’ risk allocation of standard form contracts used for onshore construction. The regulatory environment, the size and international visibility and reputation of international oil companies, the existence of joint-venture partners who have a commercial interest, and the nature of the environment in which offshore projects are constructed all have an impact on the allocation of the risks that Owners are prepared to accept, and of the risks that they require Contractors to accept. Risk allocation and liability for an event are not necessarily linked for oil and gas projects. Liability is often allocated to a party who did not cause the event which gave rise to the liability. The most commonly used risk allocation measure in offshore projects for liability arising out of personal injury, property damage and third-party claims caused by a party’s own negligence is the ‘knock for knock’ indemnity regime. Chapter 14 deals with the interconnected topics of risk and insurance, and their implementation in offshore construction projects. A number of forms of insurance are discussed as examples of policies providing insurance cover during offshore construction. Case law referred to demonstrates the limitations of available insurance.
