Tim Daneliuk wrote:
On 5/6/2010 3:37 PM, HeyBub wrote:
Jack Stein wrote:

Please, Jack. They're insured.

Please Larry, BP is self-insured, meaning, no, they are NOT insured.

Huh? "Self insured" IS insured. You can't lie about the sufficiency
of your ability to cover potential liabilities to contractors,
employees, or, more importantly, the government who grants the lease.



Really? Do you seriously believe the government does anything remotely
like regular due diligence to ensure that the insurance escrow (or
whatever they use) remains consistent with the risk as the project is
ongoing? Note that this was also the belief when AIG was insuring CDOs
via CDSs and we saw how well that worked out. Trusting the government
to be a responsible overseer is a demonstrably bad bet.

I remain firmly in the camp that regulation should be minimized
because it actually doesn't work very well, BUT that tort remedies in
these sorts of cases should be almost limitless and painful. I know it
is a conservative mantra that we need 'tort reform' and some common
sense boundaries probably do make sense. But the reality here is that
the only thing that will cause needed behavioral change is a sharp
financial feedback mechanism. i.e., BP should have to pay for the mess
they created. Letting them hide behind limits on their self-insurance
(which I'm told do exist) is ridiculous. All that's going to happen is
that they'll continue to enjoy the upside of their investments (which
I heartily approve of) but lay off the downside to the public (which
is profoundly dishonest). BP peed in the pond, they should go clean it
up and make things right with the people affected.

I don't think BP did this intentionally or even negligently. It sure
looks like an accident. But that doesn't vitiate their culpability.
They are a $240B -ish revenue company. Think of how their behavior
might change if cleaning this mess up cost them $5-$10B. They'd
probably reconsider their safety and engineering practices, not to
mention their drilling strategy.

(Bear in mind that I am way, way, way, a pro-business, free market
guy,
I just hate stealing in all its forms.)

And how much contributory negligence is due the shrimp fishermen for plying
their trade in an area where such a contingency was possible? Would it be
your position that in the absence of insurance for the shrip-catchers - or
at the least income protection insurance - is their tough luck?

There is a defensible view that the fishermen took their chances and lost.