Insurers Sue Exxon to Avoid Paying Costs of Valdez Spill

Underwriters from Lloyds of London and more than 100 other insurance firms have sued Exxon Corp. in federal court here, claiming they should not be required to reimburse the company for any of its $3.6 billion in costs stemming from the 1989 Exxon Valdez oil spill.

The insurers contend that Exxon had no legal obligation to clean up the spill in Prince William Sound, Alaska. In any event, they say in the suit filed Monday, the spill was the result of “intentional wrongdoing” by the petroleum giant and therefore not covered by the insurance.

Accusing the insurers of failing to act in good faith, Exxon issued a statement saying that “the insurance clearly covers the amounts claimed.” The company said the insurers’ suit was a response to a suit it filed in Texas state court Aug. 4 trying to force them to pay the cleanup costs.

The insurers, mostly European companies, also claim they are not responsible for the costs because the Exxon Valdez was covered by another insurance consortium, the Bermuda-based International Tankers Indemnification Assn.

Exxon declined to say how much coverage the various groups provided.

The Exxon Valdez ran aground March 24, 1989, spilling about one-fifth of its cargo of 10.2 million gallons of crude oil. The company says its actual cleanup costs totaled $2.5 billion. The company also agreed to pay $1.1 billion in civil judgments and fines following negotiations with government agencies.