The BP Oil Spill Causes an Epidemic of Claims
On Bloomberg, I gave a television interview regarding the legal and financial aspect of claims and lawsuits which are being generated as a result of the BP Oil Spill. Lost profit and business interruption claims and disputes are not novel to those of us with commercial first party insurance claims experience. Every Sunday, Michelle Claverol, in our Coral Gables office, posts about lost profit cases, which often involve complex accounting and economic issues. The BP Oil Spill is causing an epidemic of these financial loss claims, which will largely be brought as third party claims under the Oil Pollution Act of 1990.
Here is the interview:
I suspect that many insurance companies and their attorneys will be studying the nuances of the Oil Pollution Act claims process regarding first party claims. Many claims can be brought under various first party policies, depending on policy language. Subrogation claims by those insurers will also be made against BP -- after first party losses are resolved with policyholders.
BP has created this monstrous mess. It will have a very big and long tail before it is over.
Chip:
Are there pollution exclusions that are going to affect the first party claims against the insurers for these business interruption and lost profit claims? Your commentary on such exclusions would probably be very helpful for those unfortunate people and business affected by BP's near-criminal conduct in this case.
Also, are their liability limits that are going to limit BP's liability for this incident? How will they affect the policyholders or the insurers?
Thanks for info on this very complex situation.
GO CHIP!!!! Thank you for what I'm sure are the even longer days and more hard work you're putting in - to help the community (compared to what you were already doing before this tragedy) Go glad you're there.
I have read that BP now say the total cost to date is $990Million – their stock has taken a huge dive. However, surely this bill, in large part, will be picked up by layers of re-insurance? Strangely I have not read / seen anything about the insurance bill for this. In addition it is estimated that billions of dollars will be incurred in clean up costs etc. Again, this bill will fall squarely at the door of the re-insurers and not BP. Inevitably we will ALL have to pay for this in increased premiums as the cost is filtered down to personal lines cover.