Four years ago, an oil rig explosion caused more than 200 million gallons of crude oil to be released into the Gulf of Mexico over a total of 87 days resulting in the worst oil spill in US history. The explosion caused 11 workers fatalities, 17 additional employee injuries and 16,000 total miles of coastline in parts of Texas, Louisiana, Mississippi, Alabama, and Florida to be affected.
The clean-up efforts have been time-consuming and costly, however it is the legal and lasting environmental impacts which seem to be hitting energy dealer BP the hardest in recent years. In 2012, BP agreed to accept responsibility for the devastating spill and agreed to pay $4.5 billion to the US government to settle the criminal liability charges being pressed against them, agreed to put $20 billion into a trust to pay to businesses and individuals who were negatively affected by the spill. In total the company has already lost roughly $40 billion in settlement fees due to the catastrophe and more are soon to come.
This month, a US judge ruled that BP was “grossly negligent” in the lead-up to the 2010 Deepwater Horizon oil spill, asserting that BP shoulders 67% of the blame while their partners Transocean (the rig owner) and Halliburton (the cementers) were found “negligent” and responsible for 30% and 3% of the calamity respectively. As such, the decision exposes BP to even more severe civil penalties. Experts indicate that the ruling could quadruple the cost of civil penalties from what BP had planned for and result in the energy producer paying $18 billion in fees and penalties. BP representatives have indicated their intent to appeal the judgment on the basis that the ruling of “gross negligence” was unfounded.
The recent ruling against BP could indicate that the government is demanding that energy producers take more responsibility for their environmental impact and exercise even greater precautions to prevent future catastrophes such as the 2010 Deepwater Horizon oil spill.
Connecticut energy dealers, large and small, face a unique set of risk exposures due to the nature of the industry. The importance of strong safety procedures and risk management strategies cannot be overstated. From the high risk of pollution and environmental impacts to inherent potential for workplace accidents, the energy production industry is a high-risk, high rewards market which requires seasoned expertise to help protect.
At Sinclair Risk and Financial Management our staff’s knowledge of this complex and ever-changing industry helps us identify and protect against the exposures your unique operation may encounter. As part of our in-depth risk management approach, we will conduct a thorough survey and analysis of your operation to identify potential loss exposures and provide solutions to help mitigate them. We offer a complete portfolio of business insurance and risk management services to keep your business operating a smoothly and efficiently as possible; all while resting assured that your operation is covered should anything unexpectedly go awry. Give our CT Energy Dealer insurance specialists a call today at (877) 602-2305 to learn more about how we can help you.