Berkshire Hathaway moved to expand its underwriting of the oil and gas industry Wednesday as part of a new agreement with Willis Group Holdings.
Willis, a global insurance broker, announced the move Wednesday. Under the terms, Berkshire will provide coverage up to $250 million on new policies.
Berkshire has provided insurance in this sector in the past through Willis, a spokeswoman for the broker said, but Wednesday’s announcement represents a new commitment from Warren Buffett’s legendary holding company.
“This additional capacity is excellent news. It provides substantial and easy access to AA+ rated paper to the market at a time when the need for additional capacity on a range of operating and construction risks has never been greater,” Alistair Rivers, CEO of Willis Global Energy, said in a statement.
A representative for Berkshire Hathaway could not immediately be reached for comment.
Insurance rates for deepwater drilling activities markedly increased in the wake of the Deepwater Horizon disaster that left BP on the hook for billions of dollars in damages.
In July, the House of Representatives passed legislation that would lift the current $75 million liability cap for oil spills while imposing new safety standards for offshore drilling.
But the bill stalled in the Senate, and it is unclear whether the new Congress will consider action on the issue.
Source : CNN Money
