Insurers Prepare for Major Loss From the Transocean Rig Explosion

An estimated $30 million in cleanup costs have been incurred, following the Gulf of Mexico rig explosion.  BP has already spent this amount, as it has been cleaning up the oil spill that resulted from the sinking of the Deepwater Horizon, owned by Transocean.

While a Transocean executive initially said that the company thought a blowout caused the horrific offshore rig explosion, many news sources are now saying that the cause is not known.  One thing that the news media seems to agree on is that 11 of the 126 people onboard the Deepwater Horizon are still missing and are presumed dead.  The Coast Guard evacuated 17 workers, seven of which were critically injured.

Insurers are preparing for a major loss due to the Transocean rig explosion.  The Deepwater Horizon claim could be as high as $3 billion, according to some industry experts.  Just the rig alone was valued at $500 million.  Transocean’s annual report stated that the company carries $950 million in third-party liability coverage.

The Deepwater Horizon was constructed in 2001 by South Korea’s Hyundai shipyard.  The rig is 396 feet long and 256 feet wide, according to Transocean.