Offshore Energy Construction Insurance: Allocation of Risk Issues

The legal fallout from major offshore events such as the DEEPWATER HORIZON spill, PIPER ALPHA, and the grounding of the EXXON VALDEZ has resulted in extreme stress testing of liabilities allocation in upstream oil and gas project contracts.  The risks inherent in the offshore oil and gas industry are very large.  This Article examines how liability is shared during offshore construction projects, the standard insurance policy that is commonly used in respect of such risks, and a number of topical issues that parties engaged in such activity might bear in mind when they are negotiating contracts and insurance arrangements to protect their position.