Lloyds, Other Insurers Sue to Block BP Claim Against Transocean

May 26, 2010

Lloyd’s of London has asked a U.S. court to block a claim filed by oil major BP seeking damages against driller Transocean, which drilled the well which is currently gushing crude into the Gulf of Mexico.

Lloyds underwriting syndicates and other insurers who provided $700 million of cover to Transocean lodged a case with a federal court in Houston, arguing that the policies provided to Transocean preclude claims related to environmental damage caused by leaks from the well.

According to court documents, the insurers argue that Transocean’s contract with BP only makes it liable for environmental damage caused by any spills from its rig, which exploded and sank, causing the pipe running from the rig to the well to snap. The well is leaking oil.

BP said it had lodged a claim against the insurers but declined to comment further. No one was available for comment at Transocean.

Even if BP were awarded the full $700 million of cover the insurers provided to Swiss-based Transocean, it would be only a small fraction of the total bill for the cleanup operation and compensating people who suffered losses due to the spill. Analysts at UBS put the likely cost of this at $12 billion, in a report issued on Tuesday.

(Reporting by Tom Bergin; Editing by Cynthia Osterman)

Was this article valuable?

Here are more articles you may enjoy.