Mitch Harless, Senior Vice President for Claims Management, continues the conversation as Frank’s guest in this episode of Stephens Viewpoints. Frank and Mitch look at a case study — the contractual dispute from the Deepwater Horizon disaster of 2010, and the insurance claims at its center. An indemnification specialist is an important adviser to help clients understand oil patch indemnification and mutual indemnification agreements, both before and after an incident. Listen to hear more.
Key Takeaways:
[:26] Mitch Harless reveals the focus of the contractual dispute between the parties from the Deepwater Horizon disaster of 2010: environmental damage! Whose tower of insurance was at the center of the dispute?
[1:00] The incident occurred in April, 2010. In November, 2011 a District Court issued a ruling that BP could not access Transocean’s $750 million tower of insurance.
[1:53] High-value disputes become complex, and that was not the end. The United States Court of Appeals for the Fifth Circuit, in New Orleans, heard an appeal. In March 2013, they reversed the ruling of the District Court, in favor of BP.
[2:59] Transocean asked the Circuit Court of Appeals for reconsideration, to hear from the Texas Supreme Court. In August 2013, the Fifth Circuit withdrew its March opinion. How did they involve the Texas Supreme Court?
[3:55] The Texas Supreme Court examined three questions certified by the U.S. Court of Appeals for the Fifth Circuit. In February, 2015, the Texas Supreme Court answered those three questions. What was the effect of their answers?
[4:36] Transocean was able to preserve for themselves their $750 million tower of insurance.
[4:44] Did this dispute have more of an impact on the legal process or on insurance practices? This extreme example documents the dire financial ramifications for parties of indemnification agreements.
[5:15] What changes did the insurance industry make after the Deepwater Horizon disaster of 2010? What is the importance of indemnification agreements today?
[6:01] Next and final episode of this discussion: How specialists shed light on the murkier aspects of the indemnification process for stakeholders!
Mentioned in This Episode:
Deepwater Horizon Oil Spill Litigation
U.S. District Court for the Eastern District of Louisiana