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The Aftermath of the Macondo Discovery Well Spill: The Interplay of Claims to the Gulf Coast Claims Facility and Insurance Claims

The processing of claims for compensation arising from the April 20, 2010, explosion of the Deepwater Horizon offshore oil rig and its environmental and economic aftermath has proceeded simultaneously before the Gulf Coast Claims Facility and insurers. The criteria for recovery between these two recipients of claims differ significantly. Compensation from the facility has included claims for purely economic injury, whereas compensation from insurance generally requires, inter alia, a closer geographic or causal nexus to property damage. The resolution of compensation issues both by the facility and insurers will impact whether further disputes arise in the courts. Based upon similar experiences from September 11 and Hurricane Katrina, these issues are likely to continue for several years before they are fully resolved.