If you’re a restaurant or hotel owner, or food service contractor located on the west coast of Florida, your potential BP claim may be even higher than you think. Businesses such as these are designated as “tourism industry” businesses and are eligible for a Risk Transfer Premium (RTP) which was set forth to compensate claimants for potential future damages or losses not currently known.
The Deepwater Horizon Economic Settlement Program is the court-supervised program whereby BP has acknowledged the true economic harm caused by the oil spill and is paying businesses for these losses through an objective claims process. The Program, outlined in a 1,000+ page court document, lays out specific and complex formulas by which companies located in certain zones will be evaluated and compensated. The total cost of this Program to BP is currently estimated to be at least $8.5 billion, however there is no cap on the amount that may be paid under the settlement to all businesses who qualify.
Depending on geographic zone, business claims classified as tourism industry claims are subject to a multiplier between 1.25 and 2.5 times the actual revenue loss. This means that a client with a loss of, for instance, $100,000, will have a claim worth $300,000 if in a zone with a 2.0 multiplier (loss plus 2xloss). Recouping losses at this rate can make a significant difference to businesses still in the rebuilding phase since the oil spill.
Florida Restaurant and Lodging Association-member businesses were no doubt caught in the trickle-down effect of the aftermath. Tourism dropped significantly as people feared oil on the beaches as far south as Naples and the Keys. Locally, job losses and economic uncertainty led to constricted consumer spending, especially on items such as eating out and taking vacations. While the revenue loss does not have to be directly related to the oil spill, claimants must meet causation requirements based on geographic location and type of business.
As of mid March, more than 140,000 claims had been submitted, around 49,000 of which were in Florida. More than half of all claims involve a business or individual economic loss. The problem arises, however when you consider that, currently, more than half of all economic loss claims evaluated to date have been deemed incomplete. Filing can be complicated and cumbersome without legal counsel, but an evaluation can be done fairly simply by firms handling these claims. And, ERG is one of the few law firms that handles the claims from start to finish.
BP is one of the biggest proponents of this Program because it represents a way for the company to efficiently compensate a massive amount of claims, and because BP knows it’s the right thing to do. Only businesses that were truly harmed will qualify, and only those who take the steps to be evaluated will be compensated. Are you eligible? It’s worth the look.
Henry “Hank” Didier, Jr. is Founding Partner of Economic Recovery Group, LLC, (ERG) a statewide law firm dedicated to helping clients navigate the BP Settlement Program. Visit ERGLawFirm.com for more information.