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Deepwater Horizon Spill Could Cost Insurers $3.5B: Moody's

The Deepwater Horizon oil spill disaster in the Gulf of Mexico could cost insurers up to $3.5 billion, Moody's said, but A.M. Best affirmed the oil rig owner's captive insurer rating despite the losses it faces.

By Caroline McDonald | Updated on June 02, 2010

NU Online News Service, June 3, 1:55 p.m. EDT The Deepwater Horizon oil spill disaster in the Gulf of Mexico could cost insurers up to $3.5 billion, Moody’s said, but A.M. Best affirmed the oil rig owner’s captive insurer rating despite the losses it faces.

With millions of gallons of oil per day spilling into the Gulf of Mexico since April 22, threatening wetlands and fisheries and the death of 11 crew members, the Deepwater Horizon disaster appears to be far from over and Moody’s today put the current total insured loss estimate between $1.4 billion and $3.5 billion.

Moody’s noted that insured losses would be significantly higher if BP plc, the operator and majority owner of the project, had purchased liability insurance in the commercial market instead of self-insuring its risks through its captive insurer, Jupiter Insurance Ltd., for property and liability coverages.

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