Insurance Matters

9 Months Ended

Sep. 30, 2013

Insurance Matters [Abstract]

Significant Risks and Uncertainties

Note 15.  Insurance Matters

We participate as a named insured in EPCO's insurance program, which provides us with property damage, business interruption and other insurance coverage, the scope and amounts of which we believe are customary and prudent for the nature and extent of our operations.  While we believe EPCO maintains adequate insurance coverage on our behalf, insurance may not fully cover every type of damage, interruption or other loss that might occur. 

We elected to forego windstorm coverage for our Gulf of Mexico offshore assets during the 2013 Atlantic hurricane season, which extends from June 1 through November 30.  The combination of increasingly high deductibles and proposed premiums resulted in such coverage being uneconomic to us.  Although EPCO's coverage does not provide any windstorm coverage for our offshore assets during the annual policy period that began on June 1, 2013, producers affiliated with our Independence Hub and Marco Polo platforms will continue to provide certain levels of physical damage windstorm coverage for each of these key offshore assets.

West Storage Claims

We received $8.8 million of nonrefundable cash insurance proceeds during the nine months ended September 30, 2013 attributable to property damage claims we filed in connection with a  February 2011 NGL release and fire at the West Storage location of our Mont Belvieu, Texas underground storage facility.  During the three and nine months ended September 30, 2012, we collected $2.3 million and $30.0 million, respectively, of such proceeds.  We did not receive any proceeds related to these claims during the third quarter of 2013.  We remain in negotiation with our insurance carriers regarding collection of the remaining West Storage claims, which are currently estimated at $91.9 million.

Operating income during the nine months ended September 30, 2013 includes $8.8 million of gains related to these insurance recoveries.  Operating income for the three and nine months ended September 30, 2012 includes $2.3 million and $30.0 million, respectively, of such gains. To the extent that additional nonrefundable cash insurance proceeds related to this incident are received, we expect to record gains equal to such proceeds.