Page 24: of Marine News Magazine (June 2016)

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COLUMN LEGAL “Under Louisiana law, any provision in any agreement that requires additional insured insurance protection is prohibited by the Louisiana Oil Field Anti-

Indemnity Act (LOIA) and is null and void and of no force and effect. So, if you are operating in Louisiana waters, or off of the coast of Louisiana, and you sustain an incident where you may be entitled to additional insured coverage, the statute, on its face, prohibits such coverage.” cel Exception. Although additional insured coverage is pro- Although this sounds simple, due to the nature of our cured, the cost of coverage is not paid by the indemni? ed business and how these transactions unfold, it is rare that party. Thus, the additional insured provision is invalid. these conditions are all met. Unfortunately, most compa-

On the other hand, if additional insured coverage is pro- nies are not aware that they failed to properly comply with vided and the indemni? ed party is provided with an invoice the Marcel Exception until it is too late because an acci- for the procurement of coverage that does not adequately dent has occurred and someone is trying to invalidate an re? ect the cost of such coverage, that transaction is invalid indemnity request.

as well. For example, if your contract provides for the pro- With that in mind, it is probably a good time to review curement of Marcel coverage and you contractually pay your agreements to check that the indemnity language pro- $100 for the procurement of a liability policy, the courts vides a mechanism for the provision of additional insured will likely ? nd that such payment does not re? ect the actual coverage under the Marcel Exception and that your com- cost of providing insurance to the indemni? ed party. pany is complying with all of the steps required to obtain such coverage. If it does not appear that you have satis? ed

ARCEL ON MI

M , M A the Marcel test, it would not hurt to reach out to the other

So, it is important that you make Marcel your friend. party’s insurance broker to try to obtain such coverage.

When you enter into an agreement that includes an in- demnity provision with the goal of overcoming an anti- indemnity prohibition, make sure that you reach out to Mr. DeMarcay is a partner in the law ? rm of Fowler your contracting party’s insurance broker to determine if Rodriguez Valdes-Fauli. His areas of practice include additional insured coverage is available, what the actual Commercial Litigation, Admiralty, Personal Injury, cost of providing such insurance is, and ask to be billed Transportation, Real Estate, Construction and Corporate for the procurement of such coverage. Once you pay this Law. Prior to attending law school, Mr. DeMarcay served premium, if all of the other elements of the exception are on the Washington based legislative staff of Congressman met, you will have valid additional insured coverage de- Jimmy Hayes. On the WEB: www.frvf-law.com spite LOIA’s indemnity prohibition.

June 2016

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