Effective August 23, 2010, all Deepwater Horizon Incident (the “Spill”) claims must be filed with Gulf Coast Claims Facility (“GCCF”) and no longer with BP. Headed by its claims administrator, Kenneth R. Feinberg, the GCCF has replaced the BP claims process. The GCCF’s website can be found here.

Guidance on the GCCF’s website as to who may file a claim sets forth a broad list, including individuals and businesses that have incurred damages as a result of the Spill for removal and clean up costs, damage to real or personal property, lost earnings or profits, loss of subsistence, use of natural resources, or physical injury or death. Furthermore, the GCCF states that the availability to make a claim is not limited to those individuals and businesses located in the Gulf region. Any individual or business may submit a claim to the GCCF for costs and damages incurred as a result of the Spill, but the costs and damages must have been proximately caused by the Spill and must not be too remote in time or place from the Spill. The unanswered question remains, how will GCCF claim payments impact insurers’ obligations to their insureds.

The GCCF is currently classifying payments in two categories: Emergency Advance Payments and Final Payments. Emergency Advance Payments are payments available to individuals and businesses that are experiencing financial hardship resulting from damages incurred by the Spill, and claims must be filed on or before November 23, 2010. Details concerning Final Payments have yet to be posted by the GCCF.

The GCCF’s website indicates that “Collateral Source Compensation” will be deducted from a claimants’ Final Payment but not Emergency Advance Payments. According to the GCCF, Collateral Source Compensation includes amounts the claimant has received from benefits for damages incurred as a result of the Spill. Examples given include unemployment insurance, other government benefits or private insurance. Therefore, will the timing of the payment of a claim under a policy of insurance impact the amount of Collateral Source Compensation deducted from a Final Payment? Does the amount of the Final Payment affect the amount ultimately paid by an insurer for a Spill related claim? This is just the start of the unresolved issues that will impact insurers’ determination of coverage for and payment of Spill related claims.