Abstract/Summary

“Knock-for-knock” clauses or indemnities (hereinafter K4K) form part of the liability allocation model frequently found in contracts for the oil and gas industry. Historically, K4K indemnity principles have provided certainty and clarity as to the responsibilities and liabilities of the parties from a risk and insurance perspective. In these arrangements, each party obtains insurance, or self-insures, against the risks related to injury to its personnel or damage to its property. This chapter provides a historical overview of the concept of K4K clauses, and of the evolution of their meaning and functionality in the sectors of shipping and oil and gas. It also specifically explores their historical application in high-risk offshore drilling operations, whereby such clauses have been used to protect both contractors and clients from exposure to complex liability.