Carr, Riggs & Ingram Advises Businesses Filing Oil Spill Claims

Panhandle, FL - June 23, 2010 - The Deepwater Horizon oil spill is arguably the worst ecological and economic disaster in United States history with thousands of Gulf Coast businesses and owners suffering billions of dollars of economic losses. While BP Oil has promised to compensate for financial losses, this process will not occur automatically, and the current system requires proper claims be filed with BP.

In the last two months, BP has opened twenty-five claims offices in four states that have, to-date, paid 19,000 claims totaling $53 million for an average claim value of $2,790. As staggering as these numbers seem, the claims process is just beginning since many of the losses are yet to be incurred. Additionally, larger businesses with more complicated lost profits and business damage calculations have not yet filed claims.

There are at least four types of losses that businesses and owners may suffer:

• Loss of profits and earning capacity
• Loss of use of natural resources
• Oil removal costs
• Real or personal property damage

When submitting claims for any of these types of losses, they must be complete and include detailed supporting documentation. The claimant must prove damages, relationship to the BP oil spill, extent of incurred damages, and mitigation efforts.

Proving such losses can be complicated and time consuming for a business claimant - especially one struggling with the effects of the loss. Additionally, if the business fails due to the effects of the oil spill, it will be necessary to determine the value of the company prior to the oil spill event that caused its demise.

"Business owners are advised to employ knowledgeable damage assessment experts to represent them in the claims process," according to CRI partner Larry Houff, CPA, ABV, CVA, CFF. "BP is currently controlling the claims process and given the potential conflict of interest, there are important steps business owners should follow to secure the maximum claim reimbursement."

These steps include:

• Document the extent of the damages with date-stamped, before-and-after photos or video tape of property and business operations. Supplement with lists of damaged and destroyed property.
• Maintain a record log with as much detail as possible regarding specific losses incurred and loss mitigation steps.
• Keep records of lost revenues or bookings due to cancellations, and costs incurred to clean-up damaged property. Consider setting up a separate account in your company books to record costs incurred specifically related to oil spill damages.

"Businesses should file their claims for losses on a monthly basis as incurred rather than waiting until year-end," Houff advises. "Claims are estimated to total hundreds of billions of dollars, and while BP is a global company, its bank accounts have finite limits."

This tragedy is unprecedented and calls for quick and decisive action on the part of affected business owners. Depending upon the type and amount of damage, it may be necessary or advisable to engage an accountant that specializes in financial forensics - the measurement of economic damages, lost profit calculations and business valuation matters. This type of professional help will assure the business owner that all of their losses will be measured and reimbursed fairly.

For more information, please call your local CRI office: Destin, 850-837-3141; Niceville, 850-897-4333; Panama City, 850-785-6153; Tallahassee, 850-878-8777; Tampa Bay, 727-446-0504.

 

About Carr, Riggs & Ingram, LLC
CRI is ranked 34th nationally and 4th regionally for the Southeast in Accounting Today’s top 100 national firm listing. Today, CRI has over 600 employees in 20 offices throughout Alabama, Florida, Georgia, Mississippi, Louisiana and Tennessee. With two mergers already completed in 2010, CRI is recognized as one of the fastest growing firms in the United States.