Repsol: risks and coverage after the oil spill in Ventanilla

After the oil spill last January 15, during the unloading operations at Terminal 2 of the La Pampilla Refinery, Repsol It is under investigation and depends on what the competent authorities have, when their final reports determine responsibilities.

What are the main risks that companies face during these types of activities? Victor Velasco, Head of Specialties at Lockton Peru, the world’s largest independent insurance broker, pointed out that there are many risks during the unloading of crude oil.

These range from material damage, caused by a possible impact of the ship, to the possible destruction of the environment, which may be the responsibility of the tanker ship or the terminal operator. Therefore, it is important that all those involved are prepared and acquire the respective insurance.

To speak precisely of what happened in Ventanilla, the expert explains that there are three important actors during an operation of this nature:

• The operator or owner of the terminal: for this type of operation, the company must have a Civil Liability policy against third parties. Said insurance responds to bodily injury, personal or material damage with a significant insured limit; Likewise, it also includes pollution and remediation coverage, which is not only limited to control, containment and cleaning.
• Cia Naviera or tanker shipowner: in this particular case, another of the main actors is the Cia Naviera, which is in charge of moving the oil. To operate, it is important to have a Third Party Civil Liability policy called P&I (Protection & Indemnity), which mainly has coverage between one billion and two billion dollars. Said money will serve to cover contingencies for third parties affected and that come into force when the ship’s responsibility is proven.
• Operations contractors: to carry out this type of operations, the operations contractors must be present, starting with the pilots who take control of the ship to anchor it at the terminal, the divers for the connection of the hoses and those who are in charge of the environmental contingency that could occur. They must have a Maritime Civil Liability policy for errors and omissions. Likewise, the vessels they use must have coverage (P&I).

Main actions taken

On the other hand, Velasco also commented that Repsol has activated its contingency plan. This is reflected in the hiring of companies and personnel for remediation work. This type of expenses, explained the executive, are covered by the acquired Civil Liability policy.

In addition, regarding the payment of compensation to those affected, the expert pointed out that this will depend on what the victims can negotiate with the insurance company.

For this, it is important that the insurance broker can design a risk advisory plan specifically for the operation that is carried out, covering all the needs of the company in a personalized way.