The New Gulf War: Lloyds v. BP
A month after the Deepwater Horizon driling rig exploded, releasing vast volumes of oil into the Gulf of Mexico, the coverage wars have begun.
On May 21, the Phelps Dunbar law firm filed an action for declaratory relief in the federal district court in Housting, seeking a declaration that various Lloyd's syndicates do not owe additional insured coverage to British Petroleum under various excess policies issued to the rig's owner, Transocean. In Certain Underwriters at Lloyd’s London vs. BP P.L.C., 4:10-cv-01823, U.S. District Court, Southern District of Texas (Houston), Lloyd's argues that its coverage obligations with respect to BP do not extend to sub-surface releases as an agreement entered into between Transocean and BP only extended coverage to pollution “originating above the surface of the land or water from spills, leaks or discharges” and therefore should not apply to subsurface contamination.
Stay tuned.
