Ranger Insurance v. Transocean Offshore Deepwater Drilling, Inc.
710 F.3d 338
5th Cir.2013Background
- This Fifth Circuit case addresses whether Transocean’s umbrella and excess policies cover BP’s pollution-related liabilities from the Deepwater Horizon spill under Texas law.
- Transocean carried Ranger primary and four layers of excess insurance, with umbrella terms matching the policy language in identical form across carriers.
- The Drilling Contract requires Transocean to maintain insurance and to name BP and related entities as additional insureds, with a specific exclusion for Workers’ Compensation.
- Exhibit C of the Drilling Contract states BP shall be named as additional insureds in Transocean’s policies and that BP shall not be charged premium recourse.
- The district court read Exhibit C to limit BP’s coverage to liabilities Transocean expressly assumed, denying BP’s motion for judgment on the pleadings; BP appealed.
- The court must determine whether the umbrella policy itself controls coverage for BP as an additional insured, independent of the Drilling Contract’s indemnity provisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the umbrella policy limit BP’s additional-insured coverage? | BP argues policy language provides direct coverage as additional insured. | Insurers contend the coverage is limited by the Drilling Contract’s indemnity terms. | No limitation; umbrella policy controls BP’s coverage as additional insured. |
| Are the Drilling Contract’s additional insured provision and the indemnity provisions independent? | BP asserts the added-insured clause is separate from indemnities and thus channels coverage. | Insurers contend the clause is tied to indemnities and should be read to limit coverage. | The additional insured provision is separate and independent from indemnity provisions. |
| If independent, does the Drilling Contract’s language restrict BP’s coverage under the umbrella policies? | BP contends there is no such restriction in the umbrella policy terms. | Insurers rely on contract language to constrain coverage for third-party liabilities. | No relevant limitation found in the umbrella policy; BP entitled to coverage as additional insured. |
Key Cases Cited
- ATOFINA Petrochemicals, Inc. v. Cont'l Cas. Co., 256 S.W.3d 660 (Tex. 2008) (an umbrella policy can provide direct coverage to an added insured despite indemnity provisions)
- Aubris Resources LP v. St. Paul Fire & Marine Ins. Co., 566 F.3d 483 (5th Cir. 2009) (additional insured provisions may be independent of indemnity provisions)
- Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794 (Tex. 1992) (indemnity and insurance provisions may be separate and permit direct insured status)
- Fireman’s Fund v. Commercial Standard Ins. Co., 490 S.W.2d 818 (Tex. 1972) (distinguishes when indemnity triggers limit on additional insured status)