Top brokers, Munich Re tout oil spill insurance

* Top three brokers to help place oil spill insurance

* Aon Benfield to manage spill consortium, called SOSCover

* All energy retail brokers can access facility

By Jonathan Gould

FRANKFURT, Dec 21 (BestGrowthStock) – The world’s top three
insurance brokers have joined reinsurer Munich Re (MUVGn.DE: ) to
promote liability risk cover for deepwater drilling in the wake
of BP’s (BP.L: ) disastrous spill in April.

Industry leader Aon Corp (AON.N: ) will manage a consortium,
including rival brokers Guy Carpenter (MMC.N: ) and Willis Re
(WSH.N: ), that aims to boost the amount of insurance cover
available for oil drilling operations in U.S. waters.

Munich Re, the world’s biggest reinsurer, has said it is
sure that there will be demand for insurance to cover offshore
drilling but said the industry needed to work together to offer
the service at an affordable price to customers.

“Now other leading industry players and the oil industry will
assist in the development of the terms and conditions of the
sudden oil spill facility, SOSCover,” said Aon Benfield Chairman
Grahame Chilton in a statement on Tuesday.

The reinsurer has said it should be possible to raise
liability limits to at least $10 billion per drilling operation
from the current limit of up to $1.5 billion.

Munich Re itself was prepared to offer up to $2 billion in
coverage capacity.

Oil majors’ offshore operations have come under tight global
scrutiny after the April 20 explosion aboard the Deepwater
Horizon rig in the Gulf of Mexico killed 11 workers and
unleashed the worst oil spill in U.S. history.

The spill wiped about $70 billion from BP’s market value and
spurred BP to replace its Chief Executive Tony Hayward with an
American, Bob Dudley.

The U.S. Justice Department’s civil suit against BP and
eight other defendants to recover damages for the Gulf oil spill
is very aggressive, Westlaw Business Currents Editor in Chief
Ely Razin told Reuters Insider TV on Friday.

Westlaw is a unit of Thomson Reuters.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For Reuters Insider interview with Razin, click on:
For a special Report on how BP spill costs could double:


The insurance concept is based on the U.S. Oil Pollution
Act, with cover related mainly to clean up and removal costs,
natural resource and property damage, and loss of earnings in
sectors such as fisheries or tourism.

While the idea is aimed at the U.S. market, Munich Re said
it could be adapted for other regions.
(Editing by Jon Loades-Carter)

Top brokers, Munich Re tout oil spill insurance