Claims News Service, Sept. 28, 3:30 p.m. EDT — Hurricane Ritacould mean more than property damage losses for insurers in theenergy and chemical manufacturing sector, insurance brokerssaid.

“The big issue facing the chemical industry now is restartingoperations,” said Jim Walters, managing director, chemical industrypractice for Aon, which could trigger business interruptionpolicies beyond the energy sector.

Plants were shut down and evacuated, sparing facilities andlives, but now the problem is getting the fuel supplies that theplants need to operate. This will be a challenge with rail linesand highways damaged or blocked by flooding, Mr. Walters said.

The ripple effect, he pointed out, will be other manufacturersdependent upon the chemical plant products will have to ceaseoperations.

“If they can't produce and sell, they will sustain their ownbusiness interruption,” he pointed out.

Other insurance exposures that could be affected by Rita,besides property and business interruption, would be marine cargo,trucking and ocean marine, and possibly environmental, said Mr.Walters. But the main exposure would be property and businessinterruption, he said.

Pricing in this line could see some increases after a period ofsome stabilization of pricing, he explained.

“In our world, we are the first to get hit with the hard marketand the last to see the soft,” Mr. Walters noted.

Capacity would not be a problem, he said adding companies thathave more wind exposures “generally see more scrutiny thanothers.”

When it comes to loss control, Mr. Walters said the chemicalindustry is generally ahead of all others due to the volatilenature of the products it produces.

“As an industry, it pays attention to these issues,” heobserved.

Bruce Jefferies, managing director of Aon Natural Resources,said all production in the Gulf of Mexico was shut down because ofHurricane Rita, which reached Category 5 status on theSaffir-Simpson scale in the Gulf, with sustained winds exceeding160 mph at one point.

There were reports that some oil production platforms in theGulf were severely damaged and some were missing.

Chevron reported that one of its platforms, Typhoon, located in2,000 feet of water approximately 165 miles South-Southwest of NewOrleans, was severed from its mooring and suffered severe damage.Chevron said it was located and is being secured.

“Rita was every bit as damaging a storm as Katrina from anoffshore standpoint, if not worse,” said Mr. Jefferies.

One modeler, Risk Management Solutions, put offshore platformdamage and loss of production from Rita at between $1 billion and$2 billion.

Onshore, the story is different. Rita bypassed a good portion ofthe oil refining industry in Houston and Galveston, Texas, Mr.Jefferies pointed out.

Where the storm did come ashore, such as in Beaumont, Texas,refinery damage appeared to be minimal, “which is excellent news,”he said.

Until all the offshore drilling stations are inspected, however,both from above and below the water, any figures on insured lossfrom Rita “would be a wild guess,” he confessed. Anothercomplicating factor, he noted, is that the resources to survey andrepair these damaged facilities were stretched thin by Katrina, andit could be months before it is done.

This article originally appeared in The National UnderwriterP&C.