BP deferring some claims to new $20 billion fund

BP is making several changes to expedite claims payments to those affected by the Gulf of Mexico oil spill, including deferring some claims to the head of the newly formed $20 billion fund. 

Decisions on some business and individual claims will be deferred to Ken Feinberg, who is expected to take over the claims process of the Gulf Coast Claims Facility (GCCF) later this month. 

Those claims include 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, and values of property not located in close proximity to a beach that was oiled.

Besides the deferral process, BP's new procedures include simplifying documentation requirements, easing requirements for start-up businesses to prove a loss and increasing the delegation of authority for adjusters. BP also is establishing an immediate action claims team. 

"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."

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, which guides BP’s claims process," Willis said. "Ken and his team are the claims experts. It is right that they make the decisions on these claims."

BP says it has has paid out $277 million in claim payments in 93,000 checks to individuals and businesses since May 3. 

About 2,600 business claims worth an estimated $9 million were processed during the past three days, using new guidelines.

Details on the changes: 

• To ease documentation requirements, BP 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 will use the 2008 return for emergency payments. 

• For start-ups, BP will accept proof of business activity that can include bank statements, asset purchase verification and articles of association.