Lloyd’s Underwriters Ordered to Pay Citgo Over $49 Million for Lost Oil Cargo Amid Political Turmoil in Venezuela

NEW YORK – Lloyd’s underwriters and other insurers have been ordered to pay Citgo Petroleum Corp. more than $49 million to compensate for the loss of oil cargo during political unrest in Venezuela. The decision was made by a federal jury in New York.

The dispute arose from the theft of oil cargo from a Citgo facility in Venezuela during a period of political turmoil in the country. Citgo argued that the insurers were liable under its policy for the lost cargo. The insurers, however, contended that the theft was not covered by the policy.

After a lengthy trial, the jury ultimately sided with Citgo, ruling that the insurers must pay $49 million in damages. The decision could have significant financial implications for the insurers, as well as potential implications for future insurance policies covering political unrest in volatile regions.

This case highlights the challenges faced by companies operating in politically unstable countries. The risk of theft, damage, or loss of assets is increased during periods of political unrest, posing significant financial risks for businesses. Insurers play a crucial role in mitigating these risks by providing coverage for such events. However, disputes over policy terms and coverage can arise, leading to lengthy legal battles like the one between Citgo and the insurers in this case.

The outcome of this trial sets a precedent for future disputes involving insurance coverage for losses during political unrest. It serves as a reminder to both insurers and businesses operating in volatile regions to carefully review policy terms and coverage provisions to ensure that potential risks are adequately addressed.

Citgo is an American subsidiary of Venezuela’s state oil company and operates refineries and storage facilities both domestically and internationally. The company has been heavily impacted by the political and economic crisis in Venezuela in recent years, facing numerous challenges including supply disruptions, asset seizures, and legal disputes.

In summary, a New York federal jury has ruled that insurers must pay Citgo Petroleum Corp. more than $49 million for oil cargo lost during political unrest in Venezuela. The decision sets an important precedent for future disputes over insurance coverage in politically unstable regions and highlights the financial risks faced by companies operating in such environments.