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US court denies BP claim over Deepwater Horizon explosion and spill

Insurers to the operator of the Deepwater Horizon oil rig have fought off a claim by BP that it was covered under their policies when the rig exploded in the Gulf of Mexico in April last year.

BP had sued rig operator Transocean and its primary insurer Ranger Insurance and a group of excess insurers. BP sought a ruling that it was an “additional insured” under Transocean’s policies and that they covered it for pollution risks.

The Ranger policy had $US50 million ($49 million) of general liability coverage and the excess policies with various London market syndicates an additional $US700 million ($697 million).

The US District Court in Louisiana last week rejected the claim.

Judge Carl Barbier found that the drilling contract between BP and Transocean allocated responsibility for pollution risk. While Transocean accepted responsibility for pollution on or above the surface of the water, the Deepwater spill was below the surface and the responsibility of BP.

“Because Transocean did not assume these liabilities, there is no additional insurance obligation in favour of BP for these liabilities,” the judge said.