Buncefield – The Insurance Market’s Black Cloud?

Originally published in the Insurance Law Quarterly - Spring 2006 - Issue 62

On 11 December 2005, possibly the largest explosion ever to occur in Europe took place at the Buncefield Oil Depot near Hemel Hempstead. As might be expected, there was immediate speculation as to cause, with possibilities including arson, terrorism, fuel leak, storage tank failure and pipeline failure. Early estimates put the damage at £300 million; at the time of writing, some estimates have now reached £1 billion.

The Buncefield explosion made headlines around the world and cast a black cloud over much of southern England. For insurers, the consequences could be costly. BLG is already acting for over 40 separate claimants, either through insurers or directly from commercial insureds. Those claims alone look likely to be in excess of £100 million.