Judge Rules BP Can Not Use Transocean Insurance Coverage for 2010 Gulf Oil Spill

Posted in BP British Petroleum,Deepwater Horizon,Environment,Gulf Coast,Maritime Law,Maritime Lawsuits,Transocean on November 17, 2011

NEW ORLEANS, La. – U.S. District Judge Carl Barbier ruled Tuesday, Nov 15, that BP can not use Transocean’s insurance coverage to pay costs that were related to the Gulf of Mexico oil spill that occurred last April in 2010 – stating that the carriers owe no duty to pay claims or defense costs to BP.

BP filed claims with Transocean’s carriers last year that sought access to $750 million. Lloyd’s of London, along with other excess underwriters, and Ranger Insurance, Transocean’s primary insurer, opposed the claims, contending the rig owner’s contract with BP didn’t provide such coverage.

“The court finds that BP, under the drilling contract, assumed responsibility for Macondo well oil release pollution liabilities,” Barbier said in a 42-page ruling. “Because Transocean did not assume these liabilities, there is no additional insurance obligation in favor of BP for these liabilities.”

Bloomberg reports:

BP’s minority partners in the well, Anadarko Petroleum Corp. (APC) and Mitsui & Co.’s Moex Offshore LLC unit, were also sued. Anadarko and Moex joined BP in seeking coverage from Transocean’s insurance.

Brian Kennedy, a spokesman for Transocean, said the company was “pleased with the outcome.” He declined to comment further. “We will let the court’s decision speak for itself.”

The judge’s decision on insurance coverage “doesn’t in any way address the causes of the accident or any of BP’s defenses to Transocean’s claims against BP,” Scott Dean, a BP spokesman, said in an e-mail.

“The enforceability of the indemnification provision in the drilling contract will depend on the court’s determination at trial of Transocean’s conduct,” Dean said. “To allow Transocean to avoid paying its share of any damages or governmental fines and penalties in these circumstances would be against applicable law and sound public policy.”

A nonjury trial on liability for the incident is set for Feb. 27 before Barbier.

Maritime attorneys, Gordon, Elias & Seely, L.L.P. work with Jones Act clients all along the Gulf Coast and throughout the nation. We are the leading offshore injury law firm representing victims of the BP, Transocean Deepwater Horizon disaster, along with assisting businesses that were damaged by the impact of the Gulf oil spill. For a free consultation, call an expert maritime lawyer 24/7 at 800.773.6770.

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