§2780. Certain indemnification agreements invalid; additional insured coverage

            A. The legislature finds that an inequity is foisted on certain contractors and their employees by the defense or indemnity provisions, either or both, contained in some agreements pertaining to wells for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, to the extent those provisions apply to death or bodily injury to persons. It is the intent of the legislature by this Section to declare null and void and against public policy of the state of Louisiana any provision in any agreement which requires defense and/or indemnification, for death or bodily injury to persons, where there is negligence or fault (strict liability) on the part of the indemnitee, or an agent or employee of the indemnitee, or an independent contractor who is directly responsible to the indemnitee.

            B. Any provision contained in, collateral to, or affecting an agreement pertaining to a well or wells for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, is void and unenforceable to the extent that it purports to or does provide for defense or indemnity, or either, to the indemnitee against loss or liability for damages arising out of or resulting from death or bodily injury to persons, which is caused by or results from the sole or concurrent negligence or fault (strict liability) of the indemnitee, or an agent, employee, or an independent contractor who is directly responsible to the indemnitee.

            C. The term "agreement," as it pertains to a well or wells for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, as used in this Section, means any agreement or understanding, written or oral, concerning any operations related to the exploration, development, production, or transportation of oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, including but not limited to drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, altering, plugging, or otherwise rendering services in or in connection with any well or wells drilled for the purpose of producing or excavating, constructing, improving, or otherwise rendering services in connection with any mine shaft, drift, or other structure intended for use in the exploration for or production of any mineral, or an agreement to perform any portion of any such work or services or any act collateral thereto, including the furnishing or rental of equipment, incidental transportation, and other goods and services furnished in connection with any such service or operation.

            D.(1) The provisions of this Section do not affect the validity of any insurance contract, except as otherwise provided in this Section, or any benefit conferred by the workers' compensation laws of this state, and do not deprive a full owner or usufructuary of a surface estate of the right to secure an indemnity from any lessee, operator, contractor, or other person conducting operations for the exploration or production of minerals on the owner's land.

            (2) Any language in this Section to the contrary notwithstanding, nothing in this Section shall affect the validity of an operating agreement or farmout agreement, as defined herein, to the extent that the operating agreement or farmout agreement purports to provide for defense or indemnity as defined in Subsection B of this Section. This exception shall not extend to any party who physically performs any activities pursuant to any agreement as defined in Subsection C of this Section. For purposes of this Subsection, operating agreement and farmout agreement shall be defined as follows:

            (a) "Operating agreement" means any agreement entered into by or among the owners of mineral rights for the joint exploration, development, operation, or production of minerals.

            (b) "Farmout agreement" means any agreement in which the holder of the operating rights to explore for and produce minerals, the "assignor", agrees that it will, upon completion of the conditions of the agreement, assign to another, the "assignee", all or a portion of a mineral lease or of the operating rights.

            E. This Section shall have no application to public utilities, the forestry industry, or the sulphur industry, so long as the work being performed is not any of the operations, services, or activities listed in Subsection C above, except to the extent those operations, services, or activities are utilized in the sulphur industry.

            F. The provisions of this Section do not apply to loss or liability for damages, or any other expenses, arising out of or resulting from:

            (1) Bodily injury or death to persons arising out of or resulting from radioactivity; or

            (2) Bodily injury or death to persons arising out of or resulting from the retainment of oil spills and clean-up and removal of structural waste subsequent to a wild well, failure of incidental piping or valves and separators between the well head and the pipelines or failure of pipelines, so as to protect the safety of the general public and the environment; or

            (3) Bodily injury or death arising out of or resulting from performance of services to control a wild well so as to protect the safety of the general public or to prevent depletion of vital natural resources.

            The term "wild well," as used in this Section, means any well from which the escape of salt water, oil, or gas is unintended and cannot be controlled by the equipment used in normal drilling practices.

            G. Any provision in any agreement arising out of the operations, services, or activities listed in Subsection C of this Section which requires waivers of subrogation, additional named insured endorsements, or any other form of insurance protection which would frustrate or circumvent the prohibitions of this Section, shall be null and void and of no force and effect.

            H. Notwithstanding the prohibitions of Subsection G of this Section, additional insured coverage if procured as the result of an agreement shall be enforceable solely as follows:

            (1) A party can seek additional insured coverage for itself or itself and members of its group as defined by its agreement with the named insured after the party seeking additional insured coverage does all of the following:

            (a) Makes such a request for an additional insured premium quote by separate written communication to the named insured or the named insured's insurance agent or broker, or both.

            (b) Receives a premium quote from the named insured's insurer or its authorized representative.

            (c) Makes direct payment to the named insured's insurer or its authorized representative for either additional insured coverage for itself only or for itself and members of its group as defined by its agreement with the named insured.

            (2)(a) Additional insured coverage for the group shall only be valid and enforceable pursuant to this Subsection when the premium is expressly quoted for group coverage, and the payment by the additional insured is for that corresponding group premium amount.

            (b) Once additional insured coverage is actually purchased, the named insured, its insurer, or authorized representative shall notify the additional insured in writing at least thirty days before the next annual premium is due or within seven days of binding the renewal coverage for the named insured, whichever time period is less.

            (c) For any policy year where an additional insured either does not make the request pursuant to Subparagraph (1)(a) of this Subsection or does not make payment in the previous policy year pursuant to Subparagraph (1)(c) of this Subsection, the named insured, its insurer, or authorized representative are not required to notify the additional insured in writing at least thirty days before future renewals and, in such instances, the additional insured shall make a new written request for additional insured coverage pursuant to Subparagraph (1)(a) of this Subsection.

            (3) When additional insured coverage is obtained pursuant to Paragraph (1) of this Subsection, the additional insured or insureds, and not the named insured, are liable for and responsible for any applicable deductibles or retentions as set forth in the named insured's policy up to a maximum of one hundred thousand dollars, with the named insured responsible to fund the amount of the applicable deductibles or retentions, if any, in excess of one hundred thousand dollars.

            (4) Any agreement where the named insured is made to fund all or any part of the deductibles or retentions up to the first one hundred thousand dollars is null and unenforceable and the provisions of this Subsection shall not apply.

            (5) Nothing in this Subsection shall in any way be deemed to negate the prohibition against defense and indemnity as set forth in Subsection B of this Section, which defense and indemnity provisions remain null and void and against public policy.

             I. The provisions of this Act do not deprive a person who has transferred land, with a reservation of mineral rights, of the right to secure an indemnity from any lessee, operator, contractor, or other person conducting operations for the exploration or production of minerals in connection with the reserved mineral rights; provided such person does not retain a working interest or an overriding royalty interest convertible to a working interest in any production obtained through activities described in Subsection C of this Section.

            J. This Act shall apply to certain provisions contained in, collateral to or affecting agreements in connection with the illustrative activities listed in Subsection C of this Section which are designed to provide indemnity to the indemnitee for all work performed between the indemnitor and the indemnitee in the future. This specifically includes what is commonly referred to in the oil industry as master or general service agreements or blanket contracts in whatever form and by whatever name. The provisions of this Act shall not apply to a contract providing indemnity to the indemnitee when such contract was executed before the effective date of this Act and which contract governs a specific terminable performance of a specific job or activity listed in Subsection C of this Section.

            Added by Acts 1981, No. 427, §1. Amended by Acts 1981, Ex.Sess., No. 33, §1; Acts 1982, No. 237, §1; Acts 1983, 1st Ex.Sess., No. 1, §6; Acts 1995, No. 240, §1, eff. June 14, 1995; Acts 2026, No. 328, §1.