Nord Stream sues Lloyd’s, Arch et al. for $400m after pipeline blast
Natural gas pipeline operator Nord Stream is taking its insurers to court, seeking €403 million in insurance payments following underwater explosions that destroyed its pipelines carrying Russian gas to Germany.
Nord Stream is taking Lloyd's to task as the lead and representing insurer on primary ’offshore operating all risks’ policies with property damage and terrorism sections, then putting similar claims to Arch, lead representative insurer on a parallel excess policy.
Primary policies covered €100 million per occurrence per line to an annual aggregate of €200 million in excess of €10 million, Nord Stream claimed in its filing to the court.
Excess policies covered €100 million per occurrence per line in excess of the sums from the primary policies to a €100 million annual aggregate,
That looks underinsured, given the damage. Nord Streams “preliminary and high-level estimate” of costs to repair the system and replace the lost gas inventory is between €1.2 and 1.35 billion to the lines running from Portovaya in north-western Russia to Lubmin in north-eastern Germany.
To Nord Stream's eye, it can collect on both policies to the maximum amounts on assumption that the explosions that ripped apart the two separate lines over the course of a 6.5km stretch of the joint path were separate incidents. Other costs have already been racked up.
Nord Stream further argues that property section exclusions on malicious use of explosives or weapons of war, should such be acknowledged by the court, are fully countered by the terms of the terror section of both the primary and excess policies.
Defendants have yet to respond to the filed court claim.
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