All eyes are on Capitol Hill today where two separate Senate hearings get underway to examine issues and impacts of the recent Gulf oil spill. This is the first time that officials at the corporations involved in the spill, including BP, Transocean and Halliburton, will testify about the Deepwater Horizon accident.
This morningÃ¢â‚¬â„¢s hearing before the Senate Committee on Energy and Natural Resources will be followed by an afternoon hearing before the Senate Committee on Environmental and Public Works. An article in the Wall Street Journal describes how the companies are trying to shift blame for who bears ultimate responsibility for the April 20 rig explosion and fire.
Meanwhile, a BP investor has filed a shareholdersÃ¢â‚¬â„¢ derivative lawsuit against the companyÃ¢â‚¬â„¢s chief executive officer Tony Hayward and its board of directors in Louisiana. The complaint alleges that BP has a long history of ignoring crucial safety issues related to the operation of offshore rigs such as the Deepwater Horizon rig, including problems with the blowout preventer devices that so spectacularly failed during this disaster.
Over at the D&O Diary, Kevin LaCroix offers his take on this lawsuit and what it may mean for BPÃ¢â‚¬â„¢s directors and officers:
Where the BP derivative litigation may ultimately head remains to be seen. At a minimum, BPÃ¢â‚¬â„¢s directors and officers face the prospect of enormous expense defending against this litigation, and significant potential liability.Ã¢â‚¬
LaCroix goes on to note that this lawsuit represents yet another example of a company domiciled outside the United States facing a D&O claim in the U.S. courts. The susceptibility of non-U.S. companies to U.S.-based D&O litigation is a topic of recurring interest, not least to D&O insurers, he adds:
The most obvious concern to insurers is the extent to which non-U.S. companies face threats of D&O litigation in the U.S. and therefore should be paying D&O premiums commensurate with the existence of the U.S.-based litigation exposure.Ã¢â‚¬
Check out the I.I.I. release on how insurance and reinsurance markets will play a key role in covering oil spill related claims in the Gulf. Check out an I.I.I. backgrounder on offshore energy facilities and insurance considerations.