Can my prime contract force me to indemnify companies I never signed an agreement with?

Yes, if your prime contract contains reciprocal indemnity language. Courts will enforce flow-down provisions that require you to indemnify the prime contractor's clients and partners, even without direct privity. Always review indemnity clauses and ensure your insurance covers all named parties.

FEDERALCourt of Appeals for the Third Circuit

1992

Felix J. Campbell, Jr., and Annette v. Campbell v. Sonat Offshore Drilling, Inc., Union Texas Petroleum Corporation, Defendant-Third Party v. Frank's Casing Crews & Rental Tools, Inc., and Richard Kempton Webb, as Representative of Certain Underwriters at Lloyd's London, Etc., Third Party Felix J. Campbell, Jr., Et Ux v. Union Texas Petroleum Corporation v. Richard Kempton Webb, Etc.

979 F.2d 1115 • Court of Appeals for the Third Circuit • Decided 1992Enforced

Broad Indemnification Insurance Requirements Flow-DownCited 58 times

HOLDING

A worker employed by Frank's Casing Crews was injured while transferring between offshore vessels during a drilling operation. The oil company (UTP) and drilling vessel owner (Sonat) sued Frank's for indemnification under their contract. The court ruled that Frank's must indemnify both companies even though Frank's had no direct contract with the vessel owner, based on reciprocal indemnity provisions in the UTP agreement.

KEY FINDINGS

Broad Indemnification

Indemnity clauses in your prime contract can obligate you to cover parties you never directly contracted with—read all flow-down language carefully

Insurance Requirements

Maritime indemnity agreements are broadly enforceable; courts will hold you to reciprocal indemnity terms even without direct privity

Flow-Down

Verify your insurance covers all named indemnitees in the prime contract, not just your direct client, or you face uninsured liability

HOLDING

KEY FINDINGS

FULL COURT OPINION