CHIPLEY — Washington County businesses may be eligible to file claims for losses due to the Deepwater Horizon oil spill of 2010, even if they were initially denied by the BP claims offices, said Ron Bell, director of sales for NFW Consulting.
Bell spoke to the Washington County Chamber of Commerce on Thursday, at Northwest Florida Community Hospital, during the chamber’s monthly “Third Thursday” breakfast meeting.
Deepwater Horizon was the largest offshore oil spill in U.S. history.
While drilling at the Macondo Prospect 0n April 20, 2010, an an explosion on the oil rig caused by a blowout and killed 11 crewmen. The explosion also ignited a fireball visible from 35 miles away.
The resulting fire could not be extinguished and, on April 22, Deepwater Horizon sank, leaving the well gushing at the sea bed.
“The oil spill decimated the economy in this area,” Bell said. “When it first occurred to BP that they had a bad PR problem, they hired an independent insurance adjustment firm to handle the claims.”
Bell explained that when catastrophes such as hurricanes or tornadoes occur, insurance companies often hire independent adjustment firms to help with the numerous claims filed. BP hired one of those firms to handle the initial claims from businesses seeking reparations following the oil spill.
On those initial claims, in some cases BP was paying more than 10 times what the loss was worth, Bell said. Then BP realized it was putting too much money in the wrong hands.
Then the process went to the Gulf Coast Claims Facility, under Kenneth Feinberg, and the GCCF turned down many claims and lost a lot of the paperwork that residents filed with the organization, Bell said. Soon, a federal lawsuit filed in Louisiana led to a settlement from BP in which $7 billion was made accessible to pay claims through the Deepwater Horizon Claims Center.
Likewise, the nation’s best economists were called upon to come up with a formula for calculating loss due to the oil spill and the resultant economic downturn — a formula that came out in a 1,000 page document, Bell said.
NWF Consulting came about as a company when a Santa Rosa County entrepreneur, Harrell Downey, tried to submit claims for his financial advising and real estate businesses and was denied by the GCCF.
Downey learned how to file a claim with the Deepwater Horizon Claims Center, using the complex formula, then began teaching others how to file a claim by holding seminars along the coast, Bell said. The resulting firm, NWA Consulting, became the top Deepwater claims experts in the country, he added.
“In the case of the first two programs, it was the case of the proverbial fox guarding the henhouse,” Bell said. With the settlement claims center, BP is no longer in charge of who can file.
Some businesses are, however, not allowed to file claims, including banks, financial advisors and BP gas stations. Most other businesses, however, can file a Deepwater Horizon claim if they can show that there was a downturn in profits in 2010.
“The way they determine if you have a claim is to look at your profits from 2007 to 2011,” Bell said. “If they can show that you had a downturn in profit, then they do this calculation and it tells you how much you will get paid.”
NWF Consulting will file claims for local businesses, and the consultants receive a 15 percent fee on whatever amount is collected. Bell said that on average it costs NWF Consulting $7,500 to file a claim, but that cost is covered by the consulting firm and they only get paid if they collect a claim payment.
Washington County falls into zones C and D as far as claims go, with the A zone being directly on the coast. However, in the case of Alabama, Mississippi and Louisiana, the entire states are considered affected areas so towns such as McComb, Miss., which are not costal at all, have received claims.
“People are filing claims, and getting paid,” Bell said. “What we’ve seen, is if we look at four claims, one will get paid. This is pulling a lot of money back into our economy, and that is having a positive impact.”