The Gulf Oil Spill: Assessing Exposures
July, 2010
by Edward M. Kay and Melinda S. Kollross
On April 20, 2010 an explosion on the DEEPWATER HORIZON oil rig in the Gulf of Mexico killed 11 workers, injured 17 others and blew out an exploratory oil well 5,000 feet underwater. Since that time, an estimated 67 to 127 million gallons of oil have spilled into the Gulf. As efforts to successfully “cap” the well continue, the unprecedented Gulf Oil Spill presents insurers and other businesses with enormous potential exposures. Hundreds of lawsuits have already been filed against entities involved with the DEEPWATER HORIZON, including the rig’s owner, Transocean; operator and principal developer BP; Halliburton Energy Services, Inc., which installed and cemented the well’s production casing; and Cameron International Corporation, which built the well’s “blowout preventer”, a fail-safe device fitted at the base of the well. Many additional defendants are likely to be targeted by plaintiffs or third-partied into the Gulf Oil Spill litigation in the coming months, including parts manufacturers/suppliers, installation and/or service contractors, and others with some relationship to the rig or the drilling operation.
Clausen Miller is no newcomer to responding to catastrophic events in the Gulf of Mexico. For over 15 years, CM partners Kim Kearney and Amy R. Paulus have counseled and represented insurance professionals and operators in connection with offshore oil and gas exploration and production activities. In response to the Gulf Oil Spill, Kim and Amy have re-issued their 80-page white paper "Offshore Oil & Gas Drilling: What You Need to Know about the Risks and Insurance Coverages." Copies of this extremely detailed and highly informative white paper can be obtained via our website (www.clausen.com) or by contacting Kim (kkearney@clausen.com) or Amy (apaulus@clausen.com).
Clausen Miller is also currently preparing an extensive Special Report on the Gulf Oil Spill addressing numerous topics of interest to our readership, including:
- Admiralty Jurisdiction: legal implications, statutory schemes, damages;
- Liability Coverage lessons from the Past, Pertinent Exclusions, Pertinent Policies (GGL, E&O, D&O, Architects, Brokers’ E&O, EIL), Claims (Natural resource damage claims), DJ’s and Funds, and Claim Handling;
- Homeowner policy implications;
- First Party Property Insurance Coverage Issues
- Contingent BI/civil authority/ingress-egress
- Fear of loss as property damage
- Damage to insured property
- Concurrent causation issues
- Number of occurrences - Applicability and availability of D & O coverage under various insuring agreements to the Shareholder Derivative Lawsuits filed against BP;
- Survey of Tort Claims and Defendants;
- Subrogation Opportunities Arising out of Gulf Oil Spill: liability claims, hurdles, potential claimants & targets; parameters of the BP & OPA Funds;
- Potential Bankruptcy Issues Arising from the Gulf Oil Spill--Impact on Insurers;
- Implications of payment under the BP $20 billion fund on (1) bringing lawsuits against BP and/or third parties; (2) the ability to make insurance claims.
We look forward to providing our readers with these valuable resources in assessing Gulf Oil Spill exposures. For more information on any of these topics, please contact Kim Kearney at kkearney@clausen.com
Back to CM Report of Recent Decisions (2010v2) 2010 Volume 2 Table of Contents
