What you need to know.
Master Service Agreements (MSAs) and vital for service contractors in the Oil & Gas industry, but often come with one-sided indemnity obligations that increase risk and insurance costs. Contractors lacking legal support tend to sign these agreements without review, leading to financial strain. Ross & Yerger specializes in MSAs review and negotiation, helping contractors lower risk and expenses over 25 years of experience.
Contractors can secure better pricing for resources.
Contractors can build deeper client relationships.
MSAs can adapt to changing project needs.
They reduce the paperwork and negotiation associated with project contracts.
14 Primary Drivers for MSA
Breach of Representatives and Warranties
In oilfield Master Service Agreements (MSAs), the potential for "Breach of Representations and Warranties" is crucial. When claims arise that a service company violated these terms, the Oil & Gas Company might avoid indemnity. To proactively mitigate this, Ross & Yerger ensures the indemnity section stands independently, safeguarding against breaches that could compromise the Oil & Gas Company's commitment.
At Ross & Yerger, we specialize in risk solutions for the complex world of oil and gas agreements, offering you peace of mind.
Mutual Indemnities for the Contractor's and Company's bodily injury liability
In oil and gas agreements, the concept of "mutual indemnities" and "knock for knock indemnity" is often utilized. This arrangement implies that each party is responsible for its personnel's injuries. However, the seemingly comprehensive protection of these clauses can be misleading. While operators provide indemnity for injuries to their direct employees, the absence of protection for injuries to other contractors' employees on-site poses a greater risk. Given the multitude of employees and subcontractors present, relying solely on indemnity for direct operator employees leaves contractors vulnerable to claims from fellow contractors' injured personnel.
We tailor contracts to encompass a comprehensive "Company Group" definition, ensuring inclusion of the operator, its employees, and other contractors along with their employees. This proactive approach safeguards your interests in the intricate landscape of oil and gas agreements.
Property Damage Indemnities
Property damage indemnities can leave you exposed due to a large equipment loss from a fellow contractor. A situation like this could severely impact your loss history and drive up your insurance cost for years to come.
To address contractual deficiencies like this, Ross & Yerger checks each MSA to make sure they are truly mutual by including a definition of Company Group that includes the Company, Company employees, and Company’s other contractors.
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Underground Damage Liability
This risk applies to contractors that perform work down hole that can cause damage to the well casing or the well bore which in turn blocks access to underground resources. Contractors send their tools and equipment down hole but rarely control the conditions that exist there. If an accident occurs which blocks access to underground resources and the company then places responsibility for the value of its lost resources onto the contractor, the loss could financially cripple the contractor over a risk the contractor could not control.
Contrary to common belief, well blowout risks extend beyond operator control to impact oilfield service contractors. These risks are aggravated by insurance policies that often exclude well control costs and related expenses. Ross and Yerger collaborates with our contractor clients to add liability waivers to their MSAs, aligning with operators' Operator's Extra Expense insurance coverage. This proactive approach minimizes uninsured risk, improving corporate financial resilience and value.