Insurance Coverage Issues for Third-Party Businesses and Municipalities with Losses Due to the Oil Rig Explosion in the Gulf of Mexico

Insurance Coverage Issues for Third-Party Businesses and Municipalities with Losses Due to the Oil Rig Explosion in the Gulf of Mexico

   By Selena Linde, Partner, Perkins Coie LLP

An explosion at the Deepwater Horizon drilling platform in the Gulf of Mexico on April 20, 2010 left eleven workers dead. Each day since the explosion occurred, approximately 210,000 gallons of oil have spilled into the Gulf of Mexico. The oil already has contaminated the Gulf, and the oil slick appears to be headed towards shore, threatening to contaminate the coastal zone, including coastal waters and adjacent shorelands. Businesses, especially those in the tourism, fishing, and restaurant industries, have suffered or may suffer significant losses due to property damage and economic losses. For example, the federal government has issued a ban on all fishing in the area affected by the oil spill. Business losses for the Florida tourism industry alone are projected to reach $3 billion. Some businesses may be unable to operate again for months, if at all. Municipalities also may experience decreased tax revenues due to business closures. Thus, the combined economic impact of oil-spill-related losses for businesses and communities is estimated to be in the billions.

As businesses and communities try not only to respond to the disaster, but also to recover from its impact, their financial needs will be tremendous. Many businesses and municipalities may have a valuable resource available in the form of insurance, as described further below, which can play an important role in helping them recover from this disaster. This insurance may provide coverage not only for physical damage to and loss of property, but also for financial losses arising from an inability to conduct business (either at all or at the same levels as before); the extra expenses incurred in dealing with the effects of a disaster, including expenses incurred in advance to minimize any damages and losses; and the costs incurred in establishing the extent of any losses. 

Download the article: Insurance Coverage Issues for Third-Party Businesses and Municipalities with Losses Due to the Oil Rig Explosion in the Gulf of Mexico.

Also see another article co-authored by Selena Linde: Insurance Coverage for Products Liability Claims Arising from Airline Disasters.

Selena Linde is a partner at Perkins Coie LLP in Washington, D.C. Benchmark: The Definitive Guide to America’s Leading Litigation Firms & Attorneys recognized Ms. Linde as a “Future Star” in its 2009 and 2010 editions and noted that during her years of practice she has “established a significant mark on the insurance industry.” Ms. Linde has an active trial practice representing policyholders in complex insurance coverage matters in federal and state courts throughout the country and an equally active arbitration and mediation practice. She has represented corporate policyholders in a wide variety of insurance coverage cases that have involved asbestos, environmental liability, fraud, employee dishonesty, credit enhancement, libel and slander, directors and officers liability, technology security, business interruption, first-party property, trademark infringement, products liability, warranty and representation claims, and subprime auto loan risk default insurance. Furthermore, Ms. Linde advises clients on coverage audits, policy renewals, and policy language. Throughout her career, she has been involved in all aspects of litigation and successfully has recovered hundreds of millions of dollars for her clients. In addition to her insurance coverage work, Ms. Linde has handled substantial commercial litigation matters and has represented clients in fraud actions and contract disputes. She also has conducted internal investigations for clients. Ms. Linde is a regular commentator for Mealey’s Litigation Report: Insurance Bad Faith. Access Selena Linde’s Martindale-Hubbell profile on