In a statement on its website, Marsh said some excess liability insurers have indicated that they anticipate adding extremely broad exclusions to 2010-2011 policies to prospectively eliminate coverage for the oil spill resulting from the sinking of the Deepwater Horizon.
Several insurers also have said they will strictly enforce claims time-limit provisions and will not consider the date when policyholders first became aware of their potential exposure, Marsh said in the statement.
Some policies’ pollution exclusions have carve-outs that allow some coverage but require policyholders to provide the insurer with notice of a claim within a certain time period.
The Deepwater Horizon oil rig exploded at an unknown time on April 20, creating a fire that sank the rig on April 22 and resulted in a subsea oil leak first discovered on April 24. A strict reading of an 80-day notice provision would require that notice for Deepwater losses be provided by 5 p.m. EDT on July 8, although the exact date of the start of the loss is not yet known, Marsh said.
“We therefore recommend that notice be submitted as soon as possible, using the time of the explosion as the operative date for calculating notice provision deadlines,” the broker said in the statement.
Policyholders that do not provide notice of potential claims may run afoul of certain standard policy wording at renewal, such as provisions requiring an accounting of known losses, the broker said.
This article is reprinted from www.businessinsurance.com.