A Guide To Standard Offshore Conditions

The Standard is a leader in the provision of liability insurance to the offshore oil and gas industry, and is one of a handful of International Group P&I Clubs specialising in that sector The Standard Offshore Conditions are specifically designed to incorporate the Club cover for units operating in the offshore sector in a unified wording. The Conditions provide cover for a number of risks which would be excluded from normal ocean-trading P&I cover. The attached Guide describes the basis and scope of the cover and additional covers available. Under the Offshore Conditions the terms of any contract must have been approved by the Managers, and under the Contracts section of the website we set out guidelines for acceptable contracts.

Standard Offshore Conditions
The Cover
Extensions of Cover

Standard Offshore Conditions

The wording allows a short certificate to be issued which states that the insurance is on the terms of the Standard Offshore Conditions. The certificate gives details of assureds and any joint entrants, any waivers of subrogation, deductibles and the limit of the cover. There is also an area to note any extensions of cover including, for example, reference to excess War Risk P&I cover and any General Liability extension. This certificate will be sufficient evidence of coverage in most cases.

The cover and exclusions, together with necessary definitions, are contained in the Standard Offshore Conditions. In normal use there should be no need to refer to the Standard Club Rules since the offshore wording gives full details of the risks covered and the exclusions, although it does not deal with other matters such as notice periods or premium terms.

The Cover

The main part of the cover is split into the following sections:

1. Crew liabilities
   
   
2. Liabilities in respect of third parties for death injury and illness
   
   
3. Collision liability (to the extent required to fit with the hull insurance provisions)
   
   
4. Damage to property (other than by collision or pollution covered elsewhere)
   
   
5. Pollution Risks
   
   
6. Wreck Removal
   

In addition, some cover for fines is available, sue and labour costs and enquiry expenses are specifically included, and other expenses, not specifically excluded elsewhere, may also form part of a claim, subject to agreement by the Board.

Normal ocean-going P&I cover has exclusions in respect of

• drilling and production operations
• specialist operations
• heavy lift operations

The Standard Offshore Conditions provide cover in each of these areas.  Cover is also available in respect of liabilities arising from the operations of divers and of ROV's/ mini-subs, subject to the prior written agreement of the Managers.

Liabilities costs and expenses must have arisen as a result of the assured’s interest in the entered unit and the terms of any contract or indemnity must have been approved by the managers. We are able to discuss with members the level of contractual disclosure required. Standard contracts will not cause a problem. However, as the contracting environment develops, there is no substitute for specific confirmation that a particular contract is acceptable. Approval of contracts is therefore a major task of the Club’s Offshore Team which reviews hundreds of offshore contracts every year. There is an added benefit of this review, which is that we are able to observe developments in the contracting environment, and lobby against the increasing exposures faced by the Club’s members.

Please click here to view the Conditions

Extensions of Cover

There are two extensions to the cover that are regularly purchased:

1. Excess P&I War Risk Insurance – this is available, usually subject to a deductible of at least $50,000.
   
   
2. General Liability Insurance - this provides cover that an assured may need in association with a contract for activities undertaken away from the entered unit whether offshore or onshore.
   

Additional extensions may sometimes also be available at additional cost and for lower limits, for example, in respect of: redrilling costs, the costs associated with control of or seepage from the well being drilled or worked over, and for primary contract works exposure. The Club has long experience of and commitment to the provision of flexible P&I coverage for those involved in the offshore oil exploration, construction and production industries. This coverage can be tailored to members' requirements and has the potential to offer very high limits within a single package that can be configured to fit with any Hull policy. The Club offers the highest level of financial security with an enviable reputation for service.