For those who want to know how these large policies are written:
Insurance companies operate under a formula: based on investments and premium income, an insurance syndicate has X number of dollars to "risk". That risk is then distributed into various industries, locations, etc. in order to mitigate massive loss all at once. For example, in the residential market they might insure 50 houses on the coast, 50 in the plains, and 50 in the mountains. For large commercial endeavors, a syndicate will insure container ships which are travelling in different oceans. Once any boat makes port, the policy is satisfied and cancelled. That "risk" money is now available for another endeavor. Mathematically, there will always be policy limits so that a company will know what its risk is at all times, in order to make decisions about other underwriting. Anything above policy limits is the responsibility of the insured.
There aren't any companies who could take on the risk of an entire offshore well endeavor. By it's nature, that doesn't spread the risk adequately. Consequently, many companies take a portion of that risk. When the insurance broker gets enough aggregate to reach an acceptable level (assuming the insurer will be left with the rest), they build the platform, sail the ship, whatever.
In this case, the bean counters determine the expected risk for an oil rig is Y. They divide up the risk to the insurers. I don't think anyone expected that Y was really $50B. If they had determined that, no one would have underwritten the rig because too much of the syndicates' monies would be tied up for too long. I would say, they probably estimated the risk at $1B, or something. Yes, that means BP now gets $49B to self-insure.
Oh, and this: