Deepwater Horizon (2010)
The 2010 explosion of a drilling rig in the Gulf of Mexico, followed by the largest marine oil spill in US history.
Deepwater Horizon was drilling the Macondo well for BP when gas rose up the casing, got past the blowout preventer and exploded on deck. The well leaked for eighty-seven days before it was capped, and costs spread across cleanup, compensation for fishermen and coastal businesses, fines and natural resource damages. The operator largely self-insured, through its captive and its balance sheet, so most of the burden never reached the insurance market. The insurance litigation focused on one precise point: whether BP was an additional insured under the rig owner's liability policies, which the Texas Supreme Court rejected in 2015 in light of the drilling contract. The case is a reminder that in offshore energy, the contractual allocation of liability matters as much as the policies themselves.
On April 20, 2010, the Deepwater Horizon explosion killed eleven people; the well leaked until July 15, a federal court found in 2015 that 3.19 million barrels had been spilled, and BP put the total cost of the disaster at more than 65 billion dollars in 2018.
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.