BP says it has begun expediting claim payments to businesses affected by the oil disaster in the Gulf of Mexico, including establishing an Immediate Action Claims Team.
According to a press update issued yesterday, the company says that about 2,600 business claims were processed over the previous three days, using new guidelines developed to specifically address challenges faced by businesses. As a result, the firm says, business claims totalling $9 million were approved Saturday, Sunday and Monday. These payments will be mailed to businesses this week.
Of the 2,600 business claims processed the past three days, many were from small businesses while several represented a second or third payment that was expedited due to cash flow issues. Others were new claims now eligible for payment due to BP’s expanded covered claims criteria, according to BP.
“While we have paid thousands of business claims over the past 13 weeks, we recognize the frustration of small business owners who still have claims pending as we transition from the BP claims process to the Gulf Coast Claims Facility,” said Darryl Willis, of the BP Claims Team. “We heard from many businesspeople who are suffering, so we acted. These changes are designed to cut through paperwork and expedite payments.”
Under the new procedures, BP is encouraging businesses with urgent cash flow needs to contact their adjuster immediately, or they can call 800-573-8249 and tell the operator that they have an urgent cash flow need. BP said that the claim will be referred to the Immediate Action Claims Team, which is dedicated to evaluating these types of claims and expediting payments.
The new procedures include paying claims from tourist businesses not directly linked to the natural resource but located in close proximity to the affected tourist resource, such as an oiled beach; simplifying documentation requirements; easing requirements for start-up businesses to prove a loss; and increasing the delegation of authority for adjusters.
To ease documentation requirements, BP said it will accept tax returns from 2009, and in recognition of cash flow issues, pay the equivalent of roughly three months of losses. If no 2009 tax return exists because of an extension, BP said it will use the 2008 return for emergency payments. Businesses can get specific criteria from their claims adjuster.
For start-ups, BP said it is accepting proof of business activity, which can include such things as bank statements, asset purchase verification and Articles of Association.
BP said that increasing the delegation of authority for its adjusters will speed up payments as larger claims will be approved without having to go through the centralized Claims Authorization Team.
BP also said that it will defer decisions on some business and individual claims to Ken Feinberg, who will take over the claims process with the establishment of the Gulf Coast Claims Facility (GCCF) later this month.
With regard to claims that are being referred to GCCF, Willis said that there are some tough decisions to be made on a variety of claims.
“There are several thousand claims not clearly within the guidelines of the Oil Pollution Act (OPA) which guides BP’s claims process,” Willis said. He said Feinberg and his team will make the decisions on these claims.
BP offered some examples of businesses it is currently including in the claims process and those that are being deferred to the GCCF. The list is not an exhaustive of all businesses:
Restaurants or tourism businesses located in close proximity to a beach or marsh that has been oiled
Fisherman, shrimpers, oyster harvesters, etc., and charter boat operators who have been affected by the oil
Seafood processors in the affected area who do not have any seafood to process
Condo units located on beaches that have been closed due to oil
Deferred to Feinberg and GCCF
Restaurants or tourism businesses not located in close proximity to an oiled beach or marsh
Workers affected by the Moratorium
Seafood processors outside the Gulf Coast states
Values of property not located in close proximity to a beach that was oiled
BP said it has paid out $277 million in claim payments and written more than 93,000 checks to individuals and businesses since it made its first payment on May 3. BP has 37 claims offices across the Gulf Coast and a 1,650 member claims team.
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