Speaking at the 84th Annual meeting of the American Association of Managing General Agents in California, Wayne Forest Senior, owner of Forest Insurance Facilities in Metarie, and a leading member of the Louisiana insurance market warned that property owners were also facing real issues as the heavy oil make land along the Gulf coast.

He warned that property owners along the gulf coast may well find themselves faced with a sizable clean up bill which is not covered by the property insurance leaving them to pay up and then chase BP and the other firms implicated in the rig explosion and subsequent oil spill.

 “It may well be that the environment protection agency will carry out the clean up but property owners can expect a hefty bill and will have to join the queue to reclaim the money,” added Mr Forest.

However the impact on the spill may not just be the pollution but also rob New Orleans of a vital part of its defences against hurricane damage.

“The wetland which the oil slick is threatening are not only the source of life for the region’s oysters and seafood industry but also the first line of defence for the city of New Orleans when it comes to the protection again the effects of hurricanes, What has to be of real concern is the fact that the slick is threatening the seafood in the region which is where 60 percent of the US seafood supplies are sourced.

“It could leave the industry with years of problem and in a worst case scenario could devastate the industry to the point where it would be unable to recover.”

Underwriters in he US say energy rates for gulf risks have been hiked by up to 50% as the costs of the rig and well breach have been rising. However London market underwriters say at best rates have firmed slightly and they do not believe there will be a lasting legacy from the Horizon loss in terms of pricing.