Insurance and Indemnity Problems in Offshore Drilling Operations

Abstract

This paper examines marine insurance and indemnity as it relates to offshore drilling. It looks at obvious natural risks which are difficult to insure against, and then discusses Hull insurance, which is the insurance on the "hull and machinery" of seagoing vessel; Protection and Indemnity insurance, which is the "public liability" coverage for shipowners; Tower's Liability insurance which is commonly overlooked by small operators, but which is essential to protect against loss of the drilling barge when it is under tow; and Excess Liability or "Umbrella" insurance which is additional insurance monies, or secondary insurance coverage, for public liability. In discussing indemnity provisions, the author suggests that present indemnity clauses are not entirely satisfactory and that better approach may be an agreed proportioning of the risk in the individual contracts. Workmen's Compensation has jurisdictional problem in Canadian waters; both as between the federal and provincial governments and as between the United States and Canada. Added employer's liability coverage is the recommendation.