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Lloyd’s firms launch BP legal action

BP’S woes worsened yesterday when syndicates in the Lloyds of London insurance market launched legal action to stop the oil giant claiming against its Gulf of Mexico spill.

The FTSE 100 oil major is trying to claim up to $700m (£487m) for cleanup costs and damage lawsuits resulting from the crude haemorrhaged by its Deepwater Horizon rig, which exploded on 20 April. BP had no external insurance in place against the accident but is trying to access cover through policies held by Transocean, the owner of the rig.

Nearly half the syndicates in Lloyd’s – 38 separate underwriters – have asked a Houston judge to reject the claim. The British firms, who are joined by a handful of international insurers, argue they have “no additional-insured obligation” to BP via Transocean’s excess.

The filing states: “Because liability BP faces for pollution emanating from BP’s well are from below the surface and from BP’s well, those liabilities are not within the scope of the additional insured protection.”

BP says it has already received 23,000 individual claims to do with its catastrophe off the coast of Louisiana. Around 9,000 have been settled so far.

The news came as Lloyd’s delivered a trading update suggesting claims from the Chile earthquake will be around $1.4bn, at the upper end of analysts’ estimates. The market expects to pay out up to $600m for damage to the Deepwater Horizon rig itself, although it insists it has no exposure to the environmental implications of the disaster.

Shares in BP moved up 1.4 per cent to 492p yesterday.