Offshore Drilling Insurance Premiums Soar 15 To 50 Percent

Wall Street Journal:

The price to insure offshore drilling in the Gulf of Mexico has risen at least 15% since last month's Deepwater Horizon disaster and may stay permanently higher, as unknowns about the spill cleanup have left insurers feeling in the dark about their risks, industry executives say.

...

Rates have risen 15% to 25% for rigs operating in shallow water, said [Richard] Kerr, [chief executive of MarketScout, a Dallas-based electronic insurance exchange] whose monthly summary of insurance prices are followed by insurers and their commercial customers. Price increases for operations further out to sea might be as high as 50%, he said.

Read the whole story: Wall Street Journal

Comments

[jasongrundy]

05:55 PM on 05/25/2010

They can get INSURANCE???

[blueken]

11:10 AM on 05/25/2010

Does anyone really think that an insurance company is going to pick up the tab for the damage done to our coast? Or BP for that matter? What a joke. Private profits, public loses. What a sweet deal for them. For the people of LA, not so much.

[MAX1]

12:59 AM on 05/25/2010

Ode to B.P.

Beast Polluter

Operates

Beyond Parameters

Who's

Base Principle

Is To

Buy Politicians

Which

Basically Phucks

America!

[peowlemeow]

12:25 AM on 05/25/2010

Insurance backed up the sloppy safety standards and haphazard spill response .Based somehow on probabilities.They probably sold risk-based derivatives.Now they have to pay and they will probably argue that they will only base payment on the smallest spill estimates.

[progressivegreg]

10:15 AM on 05/25/2010

Can you spell BAILOUT? Wonder if Goldman Sachs and AIG are involved?

[NWGuy]

11:42 PM on 05/24/2010

The big difference between the oil companies having to pay higher insurance rates and the rest of us getting stuck with higher health insurance rates is they get to pass the cost on to ... guess who?!

[ButchManowski]

11:42 PM on 05/24/2010

This is excellent. Insurance companies are good at "managing risk". They will check to make sure safety measures are in place.

Example: In the 80's furniture manufacturing expanded fast. There were a lot on new manufacturers springing up. I was in the insurance industry for 30 years. One shop had a major fire caused by floating sawdust. Big loss. Within 4 months the manufacturers all had vacuum collection devices on all saws and sanders in the shops..

There isn't much good you can say about insurance companies but the do understand "loss control" (safety). Unfortunately, it is usually after the first big one.

[lazercat2008]

11:40 PM on 05/24/2010

But offshore drilling is safe.

[supertamsf]

11:26 PM on 05/24/2010

Which begs the obvious question: "Is the gulf spill an insurable loss?"

[lazercat2008]

11:41 PM on 05/24/2010

They were so confident, they failed to get insurance on that well.

[ReaderTeacherCitizen]

11:14 PM on 05/24/2010

Finally, some good news.

[imayes]

11:05 PM on 05/24/2010

Building up the war chest for the upcoming lawsuits!