Piper Alpha (1988)
The 1988 explosion of a North Sea oil platform, the deadliest in offshore history, whose loss spiraled through the London market.
Piper Alpha exploded after a pump whose safety valve had been removed for maintenance was restarted by a crew that did not know it. The fire was fed by pipelines from two neighboring platforms that kept pumping, and most of the victims died in the accommodation block. In the insurance market, the loss became the textbook case of the London excess of loss spiral: underwriters reinsured one another in a loop, and a single loss went round the circle several times, inflating reported amounts and concentrating the burden on a few syndicates. That spiral weighed on the Lloyd's crisis in the years that followed. The public inquiry report also brought in the UK safety case regime, which requires the operator to demonstrate for itself that its major hazards are under control.
On July 6, 1988, the explosion of Piper Alpha, operated by Occidental in the North Sea, killed 167 people; the insured loss, around 1.4 billion dollars, was then the largest ever for a man-made disaster, and Lord Cullen's report of November 1990 led to the 1992 safety case regime.
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