Deepwater Horizon Could Affect Ships' Insurance Coverage
Ocean vessel operators are watching talks in Congress over potential changes in oil pollution liability limits for the impact legislation responding to the Deepwater Horizon disaster could have on carrier insurance coverage. Under the Oil Pollution Act (OPA), liability of responsible parties is limited to $75 billion plus removal costs. One proposal being floated on Capital Hill would remove the cap, but doing so would make it difficult for underwriters to assess risk.
Last month, Mr. Foley told the Senate Environment and Public Works Committee an abrupt change in OPA limits could have unintended consequences for U.S. oil imports. "A dramatic increase in the OPA limits could result in this insurance coverage not being available through protection and indemnity clubs, and therefore the necessary pollution insurance would not be available at all to small, mid size, and even most large operators," he said.