Knock-for-Knock Indemnities: Risk Allocation in Offshore Oil and Gas Contracts

What are knock-for-knock indemnities?

A knock-for-knock clause is a reciprocal agreement to apportion liability for certain losses (usually, death or injury to personnel and damage to property) between contracting parties, supported by mutual indemnities.

A knock-for-knock regime replaces the fault-based liability regime that would otherwise apply at law with the concept that ‘loss lies where it falls’.

They are a common risk allocation mechanism in the offshore oil and gas industry utilised to provide certainty and prevent recourse against other parties.

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