Kenneth Feinberg, Administrator of the Gulf Coast Claims Facility ("GCCF"), announced that geographic proximity to the BP Deepwater Horizon incident would not preclude a legitimate individual or business claim. Mr. Feinberg stated, “I have heard from elected officials in Florida, including Governor Crist, Attorney General McCollum, CFO Sink and others, about their concerns regarding Floridians’ proximity to the spill and how, regardless of distance, there has been economic impact beyond the areas closest to the spill. After listening to these concerns, I have concluded that a geographic test to determine eligibility regarding economic harm due to the oil spill is unwarranted.”
While the GCCF states that it continues to review each claim on a case-by-case basis, claimants must prove damages resulting from the spill itself and not other causes. What is now significant is that “physical proximity from the spill will not, in and of itself, bar the processing of legitimate claims,” according to Mr. Feinberg.
As of October 13, 2010, approximately 181,000 claims have been submitted to the GCCF. While the majority of claims have come from Alabama, Florida, Louisiana, Mississippi and Texas, 8,000 claims originated from other states. The absence of a physical proximity requirement could result in an increase in claims being made from states outside of the core group. In addition, claims for lost earnings or profits continue to dominate the amount paid out by the GCCF, totaling $1.28 billion of the $1.31 billion paid. Accordingly, insurers should be mindful that claims being submitted by insureds for loss related to the BP Deepwater Horizon incident may be covered in whole, or in part, by the GCCF regardless of the insured's geographic proximity to the gulf region.