Environmental Pollution Liability and Insurance – The Deepwater Horizon Oil Spill
(Speech delivered by Dr. K. Noussia at the Max Planck Institute for Private Law, in terms of the “2010 Hamburg Lectures on Maritime Affairs” Series; Hamburg 27 Oct. 2010)
The financial impact of the April 20th, 2010 explosion and sinking of the “Deepwater Horizon” in the Gulf of Mexico is estimated to overall eclipse the
financial impact of the Exxon Valdez oil spill in 1989 – which resulted in a 3.5 billion U.S.A. dollar settlement and in 5 billion U.S.A. dollars in legal and financial
settlements. In spite of having managed to contain the “Deepwater Horizon” oil spill initially in July 2010, then again in August 2010 and finally in September 2010,
nevertheless, the environmental liability and insurance law ramifications of the disaster continue to loom large. Given the scope of the disaster, the claims involved
will, inter alia, implicate property liability, environmental liability, marine insurance and business interruption insurance or loss of production income, comprehensive
general liability, operator’s extra expenses – occurred for the control of the well, physical damage, workers compensation or employers liability. Furthermore, the
insurance loss is estimated to be spread throughout the insurance and reinsurance markets in London, the U.S.A. and Bermuda. This paper examines the liability arising
out of environmental pollution and the consequences it bears on insurance, in the light of the occurrence of the “Deepwater Horizon” oil spill. In doing so, it evaluates
the environmental pollution liability regime and the environmental pollution insurance coverage, whilst also projecting on potential future directions in both
fields.
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