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Mound Cotton Wollan & Greengrass on Insurance Implications Related to Eruption of Iceland's Eyjafjallajokull Volcano

   By Costantino Suriano, Hilary Henkind, Frank DeAngelis, Frank Montbach, and Marc Haas, Attorneys, Mound Cotton Wollan & Greengrass

On March 20, 2010, after almost 200 years of silence, the Eyjafjallajokull volcano located in southern Iceland erupted. Although the March 20th eruption continued for approximately three weeks, it consisted mainly of "30 story tall fire fountains" and did not spew much ash into the air. However, shortly after the March 20th eruption ceased, another eruption took place on April 14, 2010. Unlike the March 20th eruption, the April 14th eruption occurred beneath glacial ice, causing the lava to chill at a rapid level and creating small glass particles. This, together with the magnitude of the April 14th eruption, which was estimated to be up to twenty times larger than the March 20th eruption, caused large ash plumes filled with small glass particles to be sent into the atmosphere.

The ash plumes have been mainly spread south and east across Britain, Ireland, Scandinavia, and into the heart of Europe. Reports have indicated that the ash plumes have risen upwards of eight miles high. This would have had a serious impact on the ability of airplanes to fly safely to many European destinations. Specifically, the press reports say airplanes would be affected because the particles contained in the ash plumes would melt if they go through a plane's engine, forming a "glass-like substance" on the engine that creates a significant likelihood of engine failure.

On April 16, 2010, it was reported that about 16,000 of Europe's usual 28,000 daily flights had been cancelled. As of April 20th, airports in over twenty countries had been affected by the April 14th eruption and numerous flights had been cancelled in order to avoid the possibility of airplane crashes as a result of the ash plumes in the atmosphere. European transportation officials divided European air space into three zones − one mostly closed, one mostly open, and the other open. On April 21, 2010, six days after many European airports were initially closed due to the volcanic ash in the atmosphere, reports indicated that most European airports were expected to resume operations by the end of the day.

Airlines and industry experts are still trying to estimate the cost of the travel disruptions associated with the eruption. The unpredictability in determining when the eruptions will cease has made this a difficult task. At this time, experts have stated that it is impossible to predict how long the volcano will continue to erupt or at what intensity. A professor at the Aon Benfield UCL Hazard Research Center noted that the last large eruption from this volcano lasted more than twelve months.

Download the complete report, Coverage Implications Related to the Eruption of Iceland's Eyjafjallajokull Volcano.

Also read Eyjafjallajokull, Deepwater Horizon, and Property Insurance, by Eugene Wollan, Senior Counsel, Mound, Cotton, Wollan and Greengrass.

Iceland's Eyjafjallajokull volcano