Publications

BP Oil Spill: An Insurance Perspective

August 18, 2010
New York Law Journal

Recent estimates by Moody’s predict that insured losses from the British Petroleum (BP) oil spill in the Gulf of Mexico will ultimately reach $1.4 to $3.5 billion. The consensus in media reports is that this estimated loss is within the range that the insurance and reinsurance markets can bear without broad impact across insurance markets in general. Nevertheless, reports since the spill also indicate that property insurance rates for oil rigs operating in shallow waters have increased by 25 percent and premium rates for deepwater rigs have increased by as much as 50 percent. While it is early in the recovery process, this article reviews the status of insurance issues related to the BP oil spill, including the sources of those insurance funds and issues that may develop during the course of the claims and recovery process.