Delaware Business Insurance Update "What the 2010 BP Oil Spill Can Teach Small Business" 9-17-14

A Texas court is currently deciding on a major issue regarding contracts and insurance. Here is the scenario. Oil giant BP has been sued for billions of dollars for the 2010 Gulf oil spill. They want to access some or all of the 750 million of insurance coverage the oil rig owners, Transocean, had secured to cover the drilling operation. BP and Transocean had a contract to work with each other and  Transocean had agreed to name BP as an additional insured under those policies.  There is however some issues with how the actual insurance matches the contract and it may come down to a missing comma. The courts now have to figure this out and millions of dollars are at stake. This is a important   lesson for small business. Every day business owners sign contracts which promise insurance coverage for other parties in the contract. If the actual insurance policies do not match what was promised and legally bound in a contract, problems arise when there is a claim.  Small business owners need to read the contracts they are signing and elicit professional help from their legal, risk and insurance professionals. Though on a much smaller scale than the BP, Transocean battle, contractual insurance promises not in synch with insurance coverages can be a financial disaster for small business. Until next time be careful out there and know your risks.
G. Kevin Nemith, Pres. CNC Insurance & The Small Business Insurance Center
Serving DE, PA, MD, NJ, & VA
www.cncinsurance.com
www.bizinsurancetv.org

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