Insureds facing the possibility of losses from the BP oil disaster in the Gulf of Mexico are being advised to submit their written notice to their insurance carriers as soon as possible and no later than July 8, 5 p.m. EDT.
In a message to its customers on its Web site, global insurance broker Marsh said that insurers are indicating that they will strictly interpret any 80-day notice provisions in policies. Thus insureds should consider the April 20 date of the Deepwater Horizon explosion as the start date for calculating the notice provision, according to Marsh.
“This week, several carriers indicated that they will enforce these time limits strictly, without any weight given to the date the insured first became aware that they faced potential exposure. Therefore, if not already in process, it is important that clients and their legal counsel analyze the potential exposure to damages arising from the Deepwater Event and review all of their current excess and primary policies in order to comply with notice provisions,” March advised.
Marsh said that some excess liability carriers are planning on adding “broadly worded, event-specific exclusions to their 2010-2011 policies to prospectively eliminate coverage for the Deepwater Event.”
Thus if an insured files notice in order to comply with the time limit, “it is likely that the carrier will attempt to limit its exposure prospectively via an endorsement that excludes the Deepwater Event,” Marsh said.
If a client chooses not to notice the Deepwater Horizon event at this time, the insurer may strictly enforce the time deadline, even if all damage has not yet been established and/or the insured not aware of potential exposures.
Marsh said it is urging carriers to withdraw or narrow these exclusions, but warns that “this is an emerging market trend that raises concerns” with respect to 2009-2010 policies and raises questions about whether circumstances or claims should be notified now.
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