Adaptation and Liability

A class-action lawsuit (complaint here) by Farmers insurance against Chicago and other Illinois cities has gotten some attention (e.g., here, here, and here) because of its connection with climate change. In simple terms, Farmers (along with other insurers and property owners) suffered a lot of damage as a result of floods in April of last year, most notably in […]

Space Launch Risk Redux

Indemnification, the nation’s approach to managing some of the risks associated with the launch of privately owned rockets carrying our satellites for telecommunications, Earth observations, supplies for the International Space Station, and other services, is on its way to becoming a new annual rite of winter.  Specifically, the federal government (taxpayer) indemnifies a portion of […]

Responding to Natural Disasters—False Security or Damage Reduction?

Fire, floods, coastal storms, drought—the list of natural disasters that invoke billions in damage to communities and their economies is long and persistent. The tally of costs from Hurricane Sandy in the Northeast continues to mount, mirroring the multi-billion dollar price tags for other hurricane disasters. Yet, year after year, the US Army Corps of […]

Space Launch Indemnification

The “fiscal cliff” isn’t the only issue Congress is addressing largely on a temporary basis. Reauthorization of the 1988 Commercial Space Launch Act was due by December 31 and, just in time, the US Senate and the House of Representatives agreed to extend the Act for one year (after some disagreement as to one versus […]

BP Settles – But the Story is Far from Over

Reports of a $4.5b settlement between BP and the federal government over criminal charges related to the 2010 Deepwater Horizon oil spill have emerged today. If the reports are correct, the settlement will be the largest criminal settlement in U.S. history. The criminal settlement in the Exxon Valdez disaster was only $150m, of which $125m was immediately […]

Sandy’s Unaccounted-for Costs

Hurricane Sandy and the system it is merging with are predicted to cause substantial damage across the mid-Atlantic. Damages from climate-related disasters, like this one, are on the rise, both within the US and worldwide. This is due in large part to more people, and therefore more buildings, locating in risky areas. It is also […]

Tough Liability Rules and Unintended Consequences

The Department of Justice is suing BP, seeking to recover damages for harms from the 2010 Gulf of Mexico oil spill. These kinds of large environmental damage cases often (I would guess usually) settle. The case arising from the Exxon Valdez spill is the canonical example (litigation continued for decades but the federal government settled quickly). […]

Is Oil Spill Liability Useless?

Pete argued yesterday that raising or eliminating statutory caps on oil spill damages wouldn’t increase safety – as he put it, “the incentive argument is overblown.” There’s some truth to this, but I don’t agree with his conclusion. This is probably no surprise: in 2010 I recommended that spill liability caps be increased significantly, up to […]

The Macondo Anniversary and Liability Caps

It’s the second anniversary of the Macondo well blowout and it’s being marked in various ways.  The members of President Obama’s commission on the disaster have gotten together and issued a report card grading different actors’ performance since the spill. [Full disclosure: I was the Commission’s communications director, but I have no formal connection to the most recent effort.  All views expressed […]

Adapting U.S. Flood Insurance Policy To Climate Change

In the wake of historic flooding in the Lower Mississippi River, the House Financial Services Committee approved a bill on Friday that would raise insurance rates from the National Flood Insurance Program (NFIP) to better reflect actual flooding risks, what some are saying is an important step to adapt the NFIP to the effects of […]