Property Insurance Coverage Law Blog : Florida Insurance Lawyer & Attorney : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables, Gulfport

Rumors on the streets or email highway in the independent adjuster world are saying that BP has instructed the ONE adjusting firm assigned to handle the claims not to deploy anyone experienced in handling the Exxon Valdez oil spill claims. Please look into this and assure us that is not true and the thousands upon thousands of independent adjusters sitting at home not deployed to help are not being excluded because they have experience handling claims. That is just unimaginable and I hope proves not to be true. The numbers of people who have applied directly to ESIS and to independent adjusting firms who have heard nothing might prove what you are told when investigating this that it is a fact. Let us know please. Rumors can destroy you. Facts posted on the ever popping up response websites would be helpful. Also, I suggest you not believe one rumor that we have run out of independent adjusters available. A quick check of the number of licensed resident and non resident independent adjusters will prove this is impossible even if 10,000 are already deployed yet we hear less than 1,000 are now in the BP field claim offices.

This blog displays links for search terms adjusters use that leads them to our blog. Since the BP oil crisis, search terms are at least 50% of all search hits on this site where adjusting firms and adjusters are looking for information as to who is handling the BP Oil spill claims.

Thus far the information circulating in our discussions is that ESIS has only appointed ONE adjusting company to assist their personnel. ONE-and that firm fortunately is a reputable adjusting firm- Worley Catastrophe www.worleyco.com. Rumor on the street is that they are inundated with resumes flowing in but many many of us have not even gotten a reply to email and resume submissions.

There was also a response to my post, How to Value an Oil Spill Claim--Not an Easy Task:

Chip Merlin, a consumer attorney wrote a blog this week suggesting BP use CPA’s and accountants on the loss of income claims. While he provides good reasons, we in the claim industry are plenty capable of helping issue the $5,000 advances and there are thousands of adjusters trained in business interruption claims for loss of rents, tourism cancellations, and much more but I do agree CPA firms are often used by insurers for proper determination of amounts due for large commercial business interruption claims. In fact, my brother in law is a retired IRS CPA and has huge resources to other CPA’s who are also interested in deploying. In fact, this week I will post a large number of online business interruption links for some great information on business interruption claim training.

Any money paid to those with lost profits and earnings is better than no money. If full and prompt payment is really its goal, BP needs to hire and send legions of adjusters to DimeChimes business interruption night school, hire accountants and bookkeepers, and retain a significant number of independent economists motivated to determine the full extent of projected lost revenue. Lost income projections and continuing expense recovery have not been something typical claims adjusters have been trained to do. Other than my experience and numerous depositions, additional proof is in the internal insurance company claims manuals that instruct insurance company adjusters how send business income claims to insurance industry forensic loss accountants.

The problem is that BP has never been in the business interruption and lost income business. This is something insurance companies and adjusters do. The truth is that the insurance adjustment community is much quicker to count the sticks and bricks following catastrophic loss and traditionally take months to determine the business interruption loss. I bet that if I put a gun to the current BP liability claims adjusters and asked them how to determine the typical continuing expenses and extra expenses of a retail fish store, shrimp fleet operator, condominium, hotel, restaurant, seafood wholesaler or association of commercial fishermen whose members can no longer pay dues, most would start crying and beg for mercy.

I use this example to show how criminal it is for BP to suggest that it is taking care of claimants by simply spouting statistics of claims adjusters hired, claims offices opened, and partial monies paid. A second financial catastrophe is happening as I write because only a few in the claims industry have ever undertaken complex business loss of income analysis. I routinely have to teach my clients’ regular accountants how to do these types of claims calculations and often suggest specialized consultants help them. How are liability adjusters going to learn accounting and business to competently do this job without a plan? Telling them to read all of Michelle Claverol's Sunday posts on this blog regarding business interruption claims will not help, although it is better than nothing.

To further my point regarding the catastrophe training that Worley offers its adjusters, look at their training schedule. The typical BP Oil Spill claims handler has experience in car and structure claims. Even maritime adjusters usually turn over the financial income loss claims to insurance accounting firms like Campos & Stratis, a company I have long battled.

The BP Oil Spill will probably be the greatest loss event in terms of business income loss claims in my lifetime. Many of the BP claimants have never contemplated business loss insurance, but that is essentially what the OPA and corresponding state laws have provided. Adjusters, accountants and claimants need a quick education into the nuances and considerations of these types of losses.

Examples of reasonable mitigation expenses which will help commercial enterprises survive during the revenue loss need to explained and paid for immediately. Many of those businesses that could be expected to survive will not because BP is not proactively paying costs of survival mitigation. Most businesses simply do not have the cash or credit to front these costs themselves.

Time is of the essence for the entire Gulf Coast community when it comes to preventing this second financial catastrophe. This is truly an extraordinary situation where large scale economic ruin can be prevented if timely systems of remedy are put in place now. I believe our jurists need to appoint special masters who can listen to the concerns I have raised and put in motion a working claims process that will address the unique nature of business interruption and mitigation claims.. Everyday we fail to address the claims payment process properly, the greater the long term implications of economic damage in our Gulf Coast Community.