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Oil Spill Claims Hard to Assess

Claims alleging damage far away from the Gulf oil spill caused by the Deepwater Horizon disaster are complicating the assessment of claims from the BP Oil Spill Fund.

The Gulf Coast Claims Facility will have enough money to pay legitimate losses, but there is a danger that the volume of claims could create logjams that will slow payments, according to Kenneth Feinberg, the facility’s administrator.

“There is great concern that there will be so many claims that it will be difficult to efficiently process the claims,” Mr. Feinberg said. “But BP has made it clear that there will be adequate funding to pay claims.”

Meanwhile, while the fund has limited the insurance claims stemming from the spill, insurers may see claims if some are rejected by the GCCF, experts said. Whether rejected claimants will be able to recover losses from insurers will depend on circumstances around their losses and the type of coverage they have in place, sources said.

The GCCF was created in August to take over claims administration after BP had paid around $399 million on 127,000 claims. As of Nov. 5, the BP-funded facility had paid $3.42 billion on an unstated number of claims.

BP said this month that its latest estimate was around $40 billion for the cost of cleanup and claims payments related to the spill.

A Nov. 23 deadline is looming for claimants to file for emergency advance payments from the fund. Beyond that date, claims will be handled under a new protocol that is expected to be released soon.

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