The BP oil spill in the Gulf of Mexico is the biggest environmental disaster in U.S. history, and for many businesses and employees in Louisiana, Mississippi, Alabama, Florida, and Texas, the oil spill has also spelled financial disaster. Businesses and workers in the commercial fishing, shrimp, and oyster industry have seen their livelihoods threatened by the oil spill. So have charter boat operators, hotels, tourist attractions, rental property owners, and other businesses in popular resort areas. Those businesses rely on income from vacationers who have been scared off by rumors of oil-soaked beaches. Even some seafood restaurateurs in New Orleans are taking legal action to recover economic damages for shrinking sales (because of the public perception that seafood is tainted) and increased supply costs (due to the rising price of local oysters, shrimp, and other seafood).
This article looks at BP's compensation fund for businesses and workers affected by the oil spill and the process for getting a claim filed with the fund. (For a broader look at legal issues related to the BP oil spill, check out Nolo's article BP Oil Spill Lawsuits and Legal Issues.)
What Is the BP Claim Compensation Fund?
After some prodding from President Obama and his administration, BP set up a $20 billion escrow fund to be used to compensate businesses and workers whose financial livelihood has been damaged or threatened as a result of the BP oil spill disaster. The fund is primarily meant to help individuals and companies located in Louisiana, Mississippi, Alabama, Florida, and Texas.
Early on, claims were handled by BP itself, but as of August 23, 2010, an independent entity called the Gulf Coast Claims Facility began accepting and processing claims related to the Gulf oil spill (see the GCCF's official website at www.gulfcoastclaimsfacility.com). Individuals and businesses that file a claim can be compensated for a variety of economic damages attributable to the oil spill and cleanup efforts, including:
- personal income of employees (even "cash only" workers)
- lost business profits and diminished earning capacity
- damage to personal or business property, and
- personal injury and health problems associated with the spill and cleanup (these kinds of claims will be evaluated on a case-by-case basis; claims for mental health problems tied to the BP oil spill likely won't be covered under the fund).
Should You File a Claim?
If you or your business has been hit hard financially as a result of the BP oil spill, filing a claim with the Gulf Coast Claims Facility might be a quick way to get compensation and keep your doors open or your bills paid. But, as a condition of receiving a lump-sum payment under the fund, you'll probably be asked to waive your right to file a lawsuit against BP and others (the waiver probably won't be made a condition for the receipt of monthly "emergency" payments). It could be risky to accept a one-time payment now and waive your right to file a lawsuit when the scope of your financial losses may not be fully defined. Keep in mind also that not all claims will speed through the process. Claims for $5,000 or more are considered "large loss" claims by BP, and those claims will go through a longer review process. And as more and more claimants get in line, there's no guarantee that the $20 billion fund will be enough to compensate everyone. Before you file a claim with the Gulf Coast Claims Facility, you may want to speak with an attorney to make sure all your legal bases are covered. You can use Nolo's Lawyer Directory to locate and talk with an attorney in your area.
Filing a Claim: Documentation Is Everything
The more evidence you can show to a Gulf Coast Claims Facility adjuster, the better your chances of getting back as much of the money you lost as possible -- and getting it as quickly as possible. BP has called the lack of documentation "the single biggest issue holding up claims."
So what kind of documentation do you need to speed up your claim and collect compensation? Whether you own a business or worked in the Gulf region, you should provide a "before and after" economic snapshot. First, what did your economic situation -- business profits, sales, income, wages, tips, and the like -- look like in the months before the BP oil spill? Second, what has happened to those profit and income numbers since the spill? Here's a look at the kinds of documentation that you should locate and submit, for different types of claims.
- Lost profits for businesses. Business owners should submit accounting books, sales receipts, payroll records, tax records, bank statements, deposit slips, pay stubs, reservation cancellations, boat registration records, fishing licenses, and any other documentation you can think of to illustrate the financial impact of the BP oil spill on the business.
- Lost income for individuals. Employees and other workers can submit a tax return, W-2, or other documentation that shows the amount of income over a typical month. Deckhands and other workers in "cash only" jobs can still submit a claim, but will need to provide a photo ID, some form of documentation showing their typical earnings, and a phone number of their ship's captain or someone else who can verify employment.
- Property damage. For claims involving damage to personal or business property, the property owner should try to provide the BP claims adjuster with photos of the damaged property, receipts for cleaning and repairs, or written estimates of property repair or replacement costs.
Separate claims forms are available for commercial fishermen, crabbers, oyster lease owners, and commercial shrimpers. Once you file a claim, you will be assigned a claim number, and then a Gulf Coast Claims Facility adjuster will contact you to discuss the specifics of your claim, including what kinds of supporting documentation you will need.
How to File a Claim with the Gulf Coast Claims Facility
If you decide to file a claim with the Gulf Coast Claims Facility, here's how to get started:
- File a claim online. Find claim forms, learn more about the claim filing process, and file a claim for free on the GCCF's official website at www.gulfcoastclaimsfacility.com.
- By phone. You can file a claim over the phone by calling the GCCF call center toll-free at 1-800-916-4893.
- In person. You can file a claim in person at one of 35 GCCF offices located in Louisiana, Alabama, Mississippi, Florida, and Texas. To find the location nearest you visit the GCCF's official website at www.gulfcoastclaimsfacility.com/facility.