August 5, 2010
Many businesses have already been adversely affected by the massive oil slick in the Gulf of Mexico, and many more will be soon as the contamination intensifies and spreads. Much of that damage will be in the form of lost revenues, as resorts, fishing companies, ports, industries and other businesses are unable to use the Gulf’s waters or attract customers to seaside areas. Of course, ultimately the responsibility for those losses rests with BP, which has agreed to place $20 billion in an independently administered fund to pay claims, as well as with its partners, and to a lesser extent with other companies that own, operated and/ or built the doomed deep water oil well and platform. BP is making payments on claims submitted to it, but the press is full of reports that the claimants are dissatisfied, and dozens of lawsuits have already been filed. Thus, in all likelihood, it will take years, or even decades, to resolve those claims, and given the massive extent of the damage, BP and other responsible parties may be unable to pay all of the damages they will face. Therefore, every business affected by this disaster should look to its first party property insurance policies and determine whether it has coverage for not
only any property damage it suffers, but for lost profits as well.