The lost profit and earning capacity commercial claims arising from the BP oil spill are not easy calculations. BP should not hire liability and casualty adjusters to determine these claims, as they are now doing. In my experience, the vast majority of these adjusters do not know what they are doing when it comes to determining lost profits following business interruption. Many of my attorney colleagues advertising for these cases in a "sign them up and we’ll figure it out later mentality" have quite a bit of learning to do as well. Merely asking clients and claimants to send in financial documents and then analyzing them will not determine the amount of the lost profits and earning capacity caused by the BP oil spill.

Continue Reading How to Value an Oil Spill Claim–Not an Easy Task

Jay MacDonald, of, read a number of our posts and interviewed me regarding insurance coverage issues pertaining the BP Oil Spill. In his insurance blog post, Will Homeowners Insurance Absorb Oil?, he noted a number of my observations concerning the major issues facing policyholder insurance claims resulting from the BP Oil Spill:

Continue Reading Will Homeowner Policies Cover Oil Spill Claims?

The Destin beach’s white sugar sand was in full glory yesterday. While flying back to Tampa and looking down on the crystal blue water and the most gorgeous stretch of beach in the United States, I told Corey Harris that such beauty and fun is being wasted because of fear caused by the oil spill. A funny YouTube video about the current threat of oil and dragons makes the point:
Continue Reading Dragons Attacking Gulf Coast Beaches are a Bigger Menace Than the Oil Spill

I receive a fair amount of private emails regarding certain posts. Yesterday, I received about fifty saying that this Blog was “down.” Thanks. This blog is hosted by LexBlog and this was their explanation:

The issue, arising out of the software interfacing with our cloud server environment was identified, and repaired. We do not expect any continuing service disruptions. Your blog content was not at risk during this down time nor is it at risk at anytime. All of your work is completely backed up.

Your blogs on the LexBlog Network are hosted in a cloud environment developed and operated by LexBlog on the Amazon Elastic Compute Cloud (Amazon EC2). Amazon EC2 is widely recognized as a highly reliable environment and allows LexBlog to provide you with 99.99% uptime.

Every “cloud” has a little rain, and LexBlog has been an excellent service for us and our readers. So, I do not expect this to happen with any frequency. Sorry for the frustration.

Continue Reading Broken Tile Claims, Oil Spill Issues and Internet Problems

The tragedy of loss of human life and damage to the environment when discussing the BP Oil Spill cannot be overstated. The important role that accountants and business interruption experts will play helping prove financial loss cannot be overstated either. Experienced professionals like Bob Glasser, noted in yesterday’s Are Lawyers Pandering for BP Oil Spill Clients Going to Get Sued for Malpractice in Follow-up Class Actions? A Guest Blog Regarding Business Claims By Bob Glasser Explains and Guest Blogger Bruce Smith, who wrote The Forensic Accountant’s Role In Business Interruption And Business Income Claims, should be in high demand from businesses and entities that lose revenue and income as a result of this oil spill. Attorneys presenting these lost income claims should consider hiring such individuals as consultants and financial expert witnesses.

Continue Reading Accountants and Business Interruption Experts Will Play an Important Role Recovering BP Oil Spill Income Loss Claims

There has been a disgraceful amount of pandering by potentially incompetent lawyers to sign up BP Spill Victims. Many of these lawyers are experienced only in personal injury cases, and many are not licensed in the affected states and are using the internet to lure clients. One attorney from California, who is not licensed in Florida, gave a seminar this week in Destin, Florida, about his services. Many of these attorneys have no intention of providing sound disaster recovery advice that accountants and other experienced attorneys can provide. The "elephant in the room" is that they do not have the experience or resources to give competent legal advice but are banking on contingent percentage contracts that obligate clients to sums far in excess of what is reasonable. These attorneys do not have the competence or experience to discuss business interruption concepts because they have never practiced in this area of the law. Many attorneys are advertising and signing up clients without then doing anything that is reasonably required under the circumstances.

Continue Reading Are Lawyers Pandering for BP Oil Spill Clients Going to Get Sued for Malpractice in Follow-up Class Actions? A Guest Blog Regarding Business Claims By Bob Glasser Explains

During the Congressional hearings, Senator Jeff Bingaman, Chairman of the Energy and Natural Resources Committee, said:

If this is like other catastrophic failures of technological systems in modern history, whether it was the sinking of the Titanic, Three Mile Island, or the loss of the Challenger, we will likely discover that there was a cascade of failures and technical and human and regulatory errors.

Continue Reading BP’s “Cascade of Failures” Began Before the Oil Spill

This morning’s edition of Business Insurance has an article, Claims Could Get Messy After Huge, Costly Oil Spill, which explains that insurance claims are going to be complex and that the cost will certainly be in the billions. My reading of a FC&S discussion on the issue of "pollution" exclusions in homeowners policies indicates the same thing. Indeed, given the definition of a "pollutant" in the standard form policies, one may question whether oil escaping in a natural form would be a "pollutant."

Continue Reading Oil Spill Insurance Claims Will Be Messy and is Oil a Pollutant?

First party property coverage may exist under some common form property insurance policies for losses caused by the oil spill. While I have been rather pessimistic regarding the possibility of first party insurance companies sending legions of claims adjusters to help oil catastrophe policyholders, there appears to be some coverage available, and possibly, a lot more, depending on what the cause of the loss is eventually determined to be. These facts are important. Each coverage form is important as well and must be reviewed in detail.

Continue Reading First Party Property Coverage for the Oil Spill to Shoreline Owners

It appears that BP and others involved in the current oil spill may be taking their cues from insurance carriers. Insurers have always hedged their bets by saying that they would pay “legitimate claims” after disasters such as Hurricane Katrina and the Northridge Earthquake. This is a brilliant public relations strategy. It allows top executives to go on television and tell the world that the company cares and will do whatever it can to make people whole again. It leaves the general public with a warm and fuzzy feeling of security, even when the insurer has absolutely no intention of promptly and fully paying the full amount of damages owed.

Continue Reading BP Promises To Pay “Legitimate Claims” But Leaves Room For Maneuvering