As we continue to watch the environmental disaster unfold in the Gulf of Mexico, the final impact to the environment, property, and human health has not even begun to unfold.  According to Advisen,  as of July 9, 2010, 13 organizations including BP plc, Transocean, Andarko Petroleum, Cameron, and Halliburton, are named in loss events in legal cases stemming from the Deepwater Horizon oil rig disaster and subsequent spill.  As of early July, over 130 individual loss situations are being tracked and that may be only the beginning.
As claims and lawsuits continue to mount, commercial and habitational real estate owners along the Gulf Coast need to be cognizant that their property and casualty insurance policies may include absolute or total pollution exclusions and therefore will not address any resulting contamination from the oil spill.  With the projected higher than average hurricane season upon us, concerns including storm surge, wind-driven rain and just plain wind-driven oil-contaminated sea water (the potential “oilicane”) onto both coastal and inland, real and personal properties may compound the environmental tragedy.
Pollution Legal Liability (PLL) insurance could assist in mitigating some of the fears property owners along the Gulf may have.  PLL would provide coverage for clean-up of oil-contaminated properties as well as any resultant third-party bodily injury and property damage claims and may even be expanded to include business interruption.  In the event such contamination resulted from the oil spill, the carrier may have grounds to subrogate against BP and perhaps others.
The environmental insurance marketplace is keeping a keen eye on the events unfolding in the Gulf, with a few markets developing exclusions and underwriting restrictions, while others see an opportunity and continue to write business in the region.  New Day can assist you and your real estate clients in understanding the insurance implications of a potential “oilicane” as well the inherent insurance risks that the oil spill in the gulf poses.  Contact New Day to discuss PLL coverage for your real estate clients and allow New Day to assist in developing a comprehensive environmental insurance program.