The news this week is that BP has “controlled” the leaking of oil into the Gulf of Mexico thanks to the attachment of an experimental cap. Although the problem is not solved, it is definitely the first good news we have had in weeks since the tragic explosion at the Deepwater Horizon platform.
According to the official BP website, as of July 20 119,000 claims have been filed, with over 73,600 checks written since May 3 to claimants. The experts are predicting the total claim cost to be in the billions of dollars, not including the environmental impact to the coast of Louisiana. Some say that part of the country will never recover.
I have read with interest claims against BP being made by businesses as far north as Chicago and as far west as San Francisco. These are companies that cannot get products from various suppliers in Louisiana, specifically food related enterprises that rely upon seafood from that part of the country. The claim in several of these cases is loss of income because of a lack of supply or inferior supply of product.
Because of the way most business income insurance policies are written, there would not be any coverage available from the claimants insurance program. There was not an “event” that would have triggered a loss. Only time will tell whether or not BP will compensate these businesses, but it raises an interesting set of questions:
- Is your business dependent upon a third-party for the majority of goods and services you supply and how vulnerable are you should a catastrophic event happen where they are located?
- How would your business income and extra expense policy respond to a BP styled claim?
- What is your contingency plan, should one of your vendors suffer a natural disaster or financial disaster?
No one wants to see another BP styled catastrophe. But just to be safe, visit with your trusted advisor or call our office to see how you can better manage this important business risk.
At Texas Associates we work diligently with our clients to help them manage their risk rather than just help them purchase insurance.