A day after President Barack Obama and BP announced the creation of a $20 billion fund and a facility to pay out claims arising from the Gulf oil spill, many of the details of how it would mesh with BP’s existing claims process are being finalized — but BP said it has already sent out 3,786 checks to Floridians affected by the disaster.
The creation of an Independent Claim Facility means that there will be three possible routes for compensation from BP: the current claims process, the independent claim facility and the courts.
The facility will be just for people and businesses. So far, Floridians have received $12.6 million in compensation, BP said Thursday. By week’s end, BP said it will have paid out $85 million, or some 25,000 checks, in four states as recompense for claims including wage loss, personal injury or damages.
“We’ve said since the beginning we will pay all legitimate claims, loss or damages,” said BP spokesman Brad Etlin, from the company’s Florida Peninsula Command Post in Miami.
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Even though the force of the spill has yet to hit Florida’s beaches, the fact that BP is paying out claims here is an indication that claims for losses aren’t “confined to immediately impacted areas,” Etlin said.
Etlin said no claims have been denied so far.
Details of how the independent facility will work with the current system are being worked out, he said.
The White House said it will be run by Ken Feinberg, the former administrator of the Sept. 11 Victim Compensation Fund. Most recently, he’s been known as the “pay czar” for his job overseeing executive compensation at banks that participated in the $700 million government bailout plan.
The facility is designed to act as a “fairer, faster and more transparent” entity to pay out damage claims, the White House said Wednesday. It will be the first place people go to file a claim, although they can still go to court if their claims are denied. If Feinberg’s panel denies a claim, a panel of three judges will hear appeals.
BP has agreed to set aside $20 billion in assets up front as a guarantee for the escrow account that will fund the facility. Starting some time this year, BP will contribute $5 billion to the account, and beginning in 2011, pay $1.25 billion each quarter until the total amount is paid.
BP’s total profit last year was $16.6 billion.
The escrow account does not limit BP’s damages to $20 billion — the White House has taken care to say that the account is neither a “floor nor a ceiling for liability.”
State, local and federal government claims will be considered apart from the facility, and the U.S. attorney general’s criminal investigation into BP continues.
For now, BP’s Etlin said individuals in Florida or elsewhere should file their claims online or by visiting one of its 11 offices it has set up throughout Florida to provide in-person assistance.