He said the loss estimate was based on a conservative evaluation of the current--still vague--information." A company spokesperson said no other details about the drill platform coverage could be provided.

In addition to Hannover, other insurers and reinsurers reported to have coverage on the rig were QBE Syndicate 1036 and Munich Re, according to Guy Carpenter's catastrophe information report of the disaster. It said the rig's owner, Transocean, put the total insured value at $560 million.

Rig operator BP is responsible for cleanup and has already spent $30 million, according to Guy Carpenter. The firm said that yesterday it had flow aircraft over the spill that sprayed 25,000 gallons of oil dispersant.. Currently it said it is working on "designing interventions" to shut off the continuing leak from the rig.

The installation blew up April 21 and sank the next day, leaving 11 of the 126 workers on the platform missing and feared dead.

Coast Guard Rear Adm. Mary Landry said of the spill at a press conference today that, "We are in a verious situation," but she added that it is "premature to say this is a catastrophe." She said it was the first time the Coast Guard had dealt with a spill that was coming from a leaking well, but the service is prepared to handle it. Winds today were said to be keeping the spill away from shore.

Explaining the burn process, the Coast Guard said work boats will consolidate the oil into a fire resistant boom approximately 500 feet long and tow it to a more remote area, where it will be ignited and burned in a controlled manner. The plan calls for small, controlled burns of several thousand gallons of oil lasting approximately one hour each.

The marjority of the slick, the Coast Guard explained, will be treated with chemical dispersants and the burn will not affect other ongoing response activities, such as on-water skimming, dispersant application, and subsurface wellhead intervention operations. Preparations are also underway in Louisiana, Mississippi, Florida and Alabama to set up a protective boom to minimize shoreline impact.

Meanwile BP and /Transocean continued efforts to stop the crude oil still leaking from the well. The Minerals Management Service was reported to be inn contact with the oil and gas operators in the slick area to discuss any concerns with Coast Guard operations Currently, no production has been curtailed as a result of the response activities, the Coast Guard said.

Currently the Coast Guard said there are more than 1,000 personnel on- and offshore involved in the oil spill response efforts and 70 vessels that have been deployed have recovered 6,206 barrels of an oil-water mix.

Five staging areas are in place and ready to protect sensitive shorelines. These areas include: Biloxi, Miss.; Pensacola, Fla.; Venice, La.; Pascagoula, Miss.; and Theodore, Ala., according to the Coast Guard announcement.