Bermuda mutual insurer Oil Insurance Limited is likely to foot part of the bill for damage from a massive explosion at a fuel depot north of London on Sunday, that firefighters continued to fight yesterday.

The depot where the fire occurred ? the UK?s fifth largest ? is jointly owned by oil companies Total and ChevronTexaco. Both are members of Oil Insurance, which as a mutual company, insures its more than 80 member companies against losses from a wide range of catastrophes, from storms to oil spills, to explosions.

Elspeth Brewin, vice-president of Oil Insurance Co. Ltd. told : ?It is fair to say we would be expecting a loss [from the Hemel Hempstead explosion but it is far too soon to say the magnitude.?

The Hemel Hempstead explosion was described in media reports as the ?largest of its type in peacetime Europe?.

But officials said fears that clouds of black smoke would cause major health and environmental damage to surrounding areas were unfounded, according to a Reuters news report.

The storage depot is reinsured, according to a report in Business Insurance, with some of that reinsurance coverage underwritten at Lloyd?s of London. Lloyd?s said, in a statement, that it did not believe the market ?has significant exposure to this event?.

Insurance claims, largely from the loss of oil stocks and damage to the plant, are likely to add up to 200 million pounds ($354 million), David Way, an executive director of the energy division at insurance brokers Alexander Forbes Ltd. told Reuters.

OIL?s members ? all energy companies ? are both the company?s shareholders and its policy holders. Under the insurance contract OIL has with its members, the company?s exposure to losses is capped. And terms of the agreement bind members to reimburse the company for the claims OIL meets, over a five-year period, interest-free.

The company was hit earlier in the year by claims from hurricane activity in the Gulf of Mexico