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Deepwater Horizon oil rig continues leaking oil as claims rise

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Oil rig

Owner BP expects its self-insurance and captive insurance to cover costs associated with a massive clean-up effort, which has been said to be costing $6m a day.

Reinsurance sources have estimated that the total claims from the disaster could reach close to $1bn, much of which is expected to be covered in Lloyd's and Bermuda.

The giant oil slick from the leak resulting from the explosion could hit the fragile
US Gulf Coast shoreline this weekend as the White House and Congress launched separate probes into the worst offshore incident in nearly a decade.

Operator Transocean has said the rig is insured for $560m including total loss and wreck removal.

Bermuda (re)insurers Ace, Axis Capital and Lancashire are all on the slip for the rig according to Reinsurance sources.

Ace is said to be one of the major insurers on the slip, which was brokered by JLT's Lloyd & Partners.

Hannover Re and Munich have also said they are both expecting claims from the incident.

It was the worst oil rig disaster since 2001, when a rig operated by Petrobras PETRA4.SA off the Brazilian coast exploded and killed 11 workers

However, the spill is not comparable with the infamous Exxon Valdez disaster, which spilled about 11 million gallons (50 million litres) of oil into the Prince William Sound in Alaska when it ran aground in 1989. BP's well is spewing about 42,000 gallons (190,900 litres) of oil a day into the ocean, the Coast Guard estimates according to newswire Reuters.


This story was originally published by Reinsurance

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