Active Hurricane Season Could Stir up Oil Spill, Lawsuits
Hartford Courant (CT) (06/01/10) Sturdevant, Matthew

With researchers and forecasters estimating that the 2010 Atlantic hurricane will be active, many are concerned about who will be liable for storm surge carrying oil-laden water into homes and businesses along the Gulf of Mexico. Industry experts say insurers are ready to cover losses given that the financial markets have rebounded and an inactive hurricane season in 2009 allowed them to retain reserves. Flooding, however, is generally covered by the National Flood Insurance Program, while homeowners' insurance covers damages from wind, rain, hail, and lightning. While BP has stated it will pay for damages related to the oil spill, insurers and property owners will likely be left to sort through hurricane damage to determine which amounts to attribute to which parties and how much is related to wind and flood damage. On the other hand, federal flood insurance covers the removal of debris, but the courts will have to determine if that includes oil. Property owners also may be tasked with proving that BP's oil contaminated their property and not oil from a nearby gas station or other source. BP has paid about 28,000 claims already worth $37 million, and BP spokesman John Curry says, "In the aftermath of a hurricane, if there's any oil-related impact or damage on land related to the spill, we'll take care of it." Insurers say homeowners' insurance policies exclude pollution, so oil coverage is unlikely when hurricanes strike. Insurance Information Institute President Robert Hartwig says, "In the event that there is some inundation by contaminated water from storm surge, that is going to be something that likely government entities are going to be cleaning up, and they're going to seek to be compensated for that by BP and potentially its partners."
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