Is BP Paying for Small Biz Damages?

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Louisiana is requesting access to BP’s (Stock Quote: BP PLC) claims database, expressing concerns that the oil giant is not making good on claims filed by small business owners, employers and residents over property damages and loss of income.

"I'm concerned about reports from citizens and parish officials that many people have not been paid by BP, or have only received an initial payment of $5,000 or less," Kristy Nichols, Secretary for Louisiana’s Department of Social Services said in a press release. "More than 40 days into this disaster, people's livelihoods are on indefinite hold, it is becoming harder to support their families and some even face eviction from their homes.”

DSS, which made the request in conjunction with the Louisiana Workforce Commission, believes that access to the database will help them better understand why some claims remain unpaid. The state estimates that only 3,438 claims of the 7,469 filed have been paid out to individuals, meaning that 54% are pending.

BP denied the state’s request, saying that to allow the state access would distract the company from handling the claims on their own.

According to CNN.com, BP has paid out more than $40 million to business owners and their employees since the leak began on April 20, making payments on 15,000 of the nearly 32,000 loss claims. Estimates are based off of rough data released by the four states most affected by the oil spill: Alabama, Florida, Louisiana and Mississippi.

Florida, which releases a daily claims report, estimates that BP has made $3.5 million in payments on more than 5,000 claims. Mississippi estimates that 3,518 claims have been paid out to its residents, totaling $4.8 million, and Alabama says that 6,528 claims have been filed so far, but had no further information about which had been paid and which were pending.

BP is not releasing any state-by-state information, a spokesperson said, as thousands of claims are being added to its list each day. Currently, BP has Web sites set up for submissions of claims in Florida, Louisiana and Mississippi.  They also have 22 staffing centers open in these areas (to process the claims?).

Loss of income and damage claims by affected fisherman, crabbers, real estate, boat and other small business owners are permissible under the Oil Pollution Act of 1990. The federal law, which was passed after the Exxon Valdez oil spill in 1989, stipulates that the party responsible for the spill (in this instance BP) must pay income and property damages proven to have been directly caused by it.   

Claims that are denied payment or are not paid by BP within 90 days can be filed with the U.S. Coast Guard’s National Pollutions Fund Center. This organization, created by the OPA, uses the federal Oil Spill Liability Trust Fund to pay for expeditious oil removal and uncompensated damages.

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