Ken Petroleum hired Questor Drilling under a contract with broad indemnity language requiring Questor to cover all claims. When a dispute arose, the court ruled the indemnity clause was void because the parties never agreed in writing on equal insurance coverage amounts as required by Texas law. The case was sent back to trial on other claims. This matters because indemnity clauses—even if they look solid—can be unenforceable if insurance requirements aren't properly documented.
Indemnity clauses in Texas drilling contracts must be paired with a written agreement on equal liability insurance coverage amounts. Without this, the entire indemnity provision fails.
Use the IADC form contract carefully. Standard forms may contain indemnity language that violates the Texas Anti-Indemnity Act if insurance terms aren't explicitly agreed to in writing.
Document all insurance requirements in writing as a separate agreement or amendment. Don't rely on the indemnity clause alone—spell out coverage amounts, types, and who carries what.