No, it's more a question of capacity. In theory a company charges $x premium for $y limit. There's no such thing (in the casualty world, which is what this is) as no top end on the limit. Generally speaking, BP (for instance) probably self-insures the first $1M to $5M and then buys excess coverage over that. There are probably 2-5 companies on the first $100M in limits, then they probably buy increments of $25M to $50M to build up to probably about $500M. After that, there are a few players that can offer up to $100M in limits over that first $500M. The problem is that there's a finite number of times the same insurance companies will participate in an insurance program because they're concerned about this exact set of circumstances - a massive loss where they're paying all their limits that turns a $25M bad bet into a $250M career-killer.
Here's an example from one carrier:
H
Quote:
AMILTON, Bermuda—Aspen Insurance Holdings Ltd. said Thursday that its preliminary loss estimate for claims related to the Deepwater Horizon disaster is “unlikely to exceed” $25 million.
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The Hamilton, Bermuda-based insurer said that while it is not yet possible to estimate the environmental and economic damages as a result of the sunken oil rig and subsequent oil spill in the Gulf of Mexico, the company believes “the majority of scenarios including those which are most likely to occur” will cost Aspen less than $25 million.
In a statement, Aspen said it has been monitoring the events in the Gulf during the past few weeks and evaluated a range of scenarios concerning insurance liabilities for different parties involved before coming up with a loss estimate.
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If I remember correctly, Aspen wrote the hull coverage on the Deepwater Horizon.