On April 20, 2010, a devastating explosion occurred on the British Petroleum’s Deepwater Horizon, an oil rig stationed 52 miles off the coast of Louisiana in the Gulf of Mexico. The rig sank two days later, creating an oil slick 1mile wide and 5 miles long. The U.S. Coast Guard also discovered that oil continued to leak from the well more than a mile below sea level at a rate of more than 5,000 barrels per day. On April 29 th, oil began to reach the barrier islands and marshes outlining Louisiana. Soon after, the slick began to threaten beaches in Mississippi, Alabama and the Florida panhandle.

The Effect on the Fishing Industry

Fishermen and shrimp boat operators felt the immediate impact of the oil spill. 46,000 square miles of federal gulf waters were closed as the Coast Guard, BP and a host of state and local agencies sent teams to create booms to collect the oil and work the coastline to clear oil from beaches. Many businesses are filing lost business claims with BP to account for income they would have received were it not for the oil spill. In many instances, business interruption insurance does not cover environmental disasters, so the payouts from BP largely compensate for lost income as well as inventory that fishing suppliers cannot sell.

BP’s website claims that “reasonable effort” will be made to make payments to those making claims within 48 hours. According to a USA Today report, more than 42,000 claims have been filed and 20,000 have received at least partial payment. BP says that it has paid more than $53 million in claims thus far. However, some claimants have found difficulty with the information required to garner payment as well as the payment process, and speculation abounds as to whether claims will actually turn into lawsuits.

The Oil Spill’s Effect on Tourism

Anxious hotel and resort owners along the Gulf feared the presence of tarballs along the pristine shores and waters advertised to tourists. Tarballs are small, condensed pieces of oil that were not completely disintegrated by the dispersants used to break up the slick as it moved through the Gulf. They have washed ashore as globs of brownish orange goo.

A number of municipalities have closed beaches while cleanup crews try to corral the oil that has washed ashore. In Florida, the spill has affected beaches from Pensacola to Destin, including those outlining Perdido Key, Big Lagoon, Gulf Island and Fort Wayne Beach. In Alabama, oil is now staining the beaches on Dauphin Island. Mississippi’s Petit Bois Island has also seen strands of caramel colored oil. Tar balls have also been found as far south as Key West, Florida.

Tar Ball Hazards

Officials recommend that people stay away from the oil stained beaches, but medical experts say that coming into contact with a tarball or swallowing small amounts of oil is not a major hazard. Because the oil coming ashore is medium sweet crude, it is less hazardous than other forms of oil and does not have as many toxic compounds. The Center for Disease Control recommends that oil on bare skin be washed off as soon as possible.

Response by Hotels

Several hotels have seen cancellations and slower business since the spill occurred. Laura Lee, a spokeswoman for the Pensacola Bay Area Convention and Tourism Board, says that the phones just stopped ringing for new bookings this summer. She also states that a wave of hotel cancellations occurred after the Deepwater Horizon incident in April.

Some hotels have eased their cancellation policies in light of the spill, and others have ramped up their guarantees. The Casa Marina Hotel and the Reach Resort in Key West offered “clean beach” guarantees to offset tourist concerns. The spill has not dampened enthusiasm for the grand opening of the Margaritaville Hotel, Jimmy Buffet’s $50 million resort in Pensacola. Nevertheless, a few discounts are being offered in light of wavering interest for vacation destinations.

What Disaster Compensation Claims are Available?

A number of potential plaintiffs, including commercial fishermen, shrimp boat operations, and hotel owners affected by stained beaches, could seek monetary damages from BP based on common law theories of negligence and strict liability. When drilling for oil in the Gulf, BP owed a duty of care to all parties who use the Gulf waters to earn income. When that duty is breached, BP may be held liable to all parties involved. Class action lawsuits have been initiated in Florida, Alabama, Mississippi and Louisiana.

If your business has been substantially affected by the BP oil spill, an experienced attorney can advise you of your legal rights and help you obtain compensation.

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