By MARY CAFFREY, a former statehouse reporter and municipal township manager, who covered public issues for more than 20 years
The Vessels of Opportunity program seemed like such a simple idea: With Gulf waters closed to commercial and sport fishing, hire idled boats and crews to help clean the Deepwater Horizon oil from the water. It turned out to be anything but easy.
According to experienced agents in Louisiana and Mississippi, insurance requirements were just one reason. Initially, the word was out that BP wanted all vessels, even small ones, to have $1 million in protection and indemnity coverage. Many larger boats and crews had that amount already. The trouble came with the smaller boats, especially the family-owned fishing operations, which carried lower amounts or none at all.
John W. Fisk of Fisk Insurance in New Orleans, an experienced maritime agent, said that, when boat owners tried to increase limits, the underwriters were having none of it.
"Most flatly refused," he said, although he did not name names.
"They were not too anxious to see the boats running back and forth in the oil. Sooner or later, they would get stuck with claims for mechanical issues," Fisk said, such as oil clogging the engine or other mishaps.
For a short time, it was hard to get maritime coverage at all, because underwriters feared the new boat would be out in oily water even if the owner only bought for personal use, he said.
But that meant that the very fishermen the Vessels of Opportunity program was designed to help would be left out in the cold. Further complicating things were opportunists--seasonal boaters who had insurance and threatened to crowd out those who had lost their only source of income.
Billy Nungesser, president of Plaquemines Parish, said he heard the complaints about insurance coverage right away but that the requirement "went away real fast." Louisiana Insurance Commissioner Jim Donelon said he, too, heard some reports but nothing specific.
Whatever requirements were verbally relayed at the program's onset, they were not mentioned in a July 7, 2010, flier posted on the BP Vessels of Opportunity website. The requirements made no mention of insurance, only that crew members had to receive training and that the vessel had to be a registered commercial vessel prior to March 31, 2010. This requirement was added so that the program could appropriately target the unemployed fishermen and charter captains.
Jeff Albright, CEO of the Independent Insurance Agents and Brokers of Louisiana, said word of the Vessels program raised flags among agents who worried their customers would jump to get into the program, thinking that the policy on their boat might cover any problems--when it fact it might not.
"Some people may be engaging in the cleanup without informing their companies that they are doing that," he said. "The insurance company insured the vessel as a shrimp boat; the company might not have any clue he's doing that kind of work."
"I'm hearing it a lot from agents, no matter what type of risk, the insurance companies are very hesitant to write on the cleanup of this exposure," Albright said. "They've been burned with asbestos, tort claims, employee injury claims, and they are hesitant to insure the cleanup."
John J. Bullock, president of Willis of Mississippi Inc. based in Pascagoula, Miss., who assisted in the Vessels of Opportunity Program, said that the system did evolve to eliminate many of the recreational boaters and focus on the commercial fishermen who truly know the waters. Insurance requirements evolved also, with the larger craft and equipment, such as cranes and barges, being asked to meet certain insurance requirements.
The Vessels of Opportunity, however, are covered by BP, mostly under its self-insurance program.
Michael Brown of Ellsworth Corp. of Metairie, La., saw two types of contracts while trying to assist customers in July. Contracts for larger vessels, such as barges that might be taking on the spoils from other boats, required so much coverage it was virtually impossible to find anyone willing to write such a policy, Brown said. On the other end of the spectrum, a contract for boats performing skimming operations--typical of out-of-work fishermen--asked only for the owner to maintain existing coverage and to meet statutory requirements for workers' compensation.
Whatever the early kinks, the Vessels of Opportunity program ran into another issue later on--or didn't run into it. Both Fisk and Bullock reported that the vessels that were on the water in mid-August were having a hard time finding oil.
"I've been out 40 to 50 miles south and 100 miles to the east, and you just don't see any oil," Bullock said. (He also maintains a commercial fishing license.)
"Obviously, they captured some of the oil, dispersed some, and some of it evaporated or was weathered in the rough seas ... But for a spill of the magnitude estimated, I'll be darned if I know where the oil is."
On Sept. 15, BP's Mobile Incident Command Post announced that it was ending the Vessels of Opportunity program in Alabama, Mississippi and Florida.
October 1, 2010
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