Filed Under:Markets, Litigation

Insurers File Action Against BP, Transocean to Clear Up Confusion Around Excess Policy

Some Lloyd’s of London underwriters and Arch Insurance Company are asking a federal court to require BP and Transocean to settle their dispute over claims submitted to the insurers.

The insurers say in an interpleader action filed yesterday in the United States District Court for the Eastern District of Louisiana that they are facing multiple claims that threaten to exceed the limits available in an excess layer of coverage they wrote insuring Transocean. BP has claimed that it is an unrestricted additional insured under the excess layer and has continued to submit claims alongside Transocean. 

The claims stem from the 2010 Deepwater Horizon oil spill. 

Whether BP is, in fact, eligible for coverage is among a number of topics that are the subject of a separate legal action currently under appeal in the Fifth Circuit.   

The insurers filed this latest civil action to ensure payments are made to “the proper persons or entities, according to court oversight.”

The insurers say Transocean has submitted to the insurers “certain amounts for reimbursement that Transocean has paid or incurred in connection with the Deepwater Horizon casualty.” 

The suit adds, “BP has also submitted and is expected to continue to submit claims for reimbursement for settlements of personal-injury claims of Transocean crew and/or BP and Transocean subcontractor-employee claims.”

Meanwhile, the limit of the policy underlying the excess coverage in question has been exhausted, and the insurers say they are facing “multiple, potentially conflicting and competing asserted interests to proceeds that may subject the [insurers] to potential claims for reimbursement equal to or greater than the available limits of coverage.”

The insurers are asking the court require Transocean and BP to “interplead” their claims -- or settle who is the proper claimant. The insurers also ask the court to allow them to reimburse Transocean for “properly submitted, reasonable and covered claims submitted to date and in the future.” 

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