Thoroughly Documenting Efforts And Expenses Is Crucial To Proving Claims From The Oil Spill

May 05, 2010 By Corey Harris Insurance

Thanks to all who attended yesterday’s town hall meeting in Destin, Florida. For all of you who were not able to make it, we had a huge turnout. The 500 seats filled quickly.

My condominium clients have been asking many questions about the oil spill situation, but the main concern is how they should document their damages. While the oil spill may not be covered under a typical insurance policy, documenting damages for this event is much the same as when a hurricane is swirling towards land.

In order to show loss of rents or business interruption, the condominium should keep detailed records of why individuals are cancelling their reservations. Reservationists should have a script to follow in the event of a cancellation and should inquire specifically about whether the oil is the ultimate reason. If so, the caller’s contact information should be taken and kept in a separate file kept in preparation for a claim. Associations should consider requiring cancellations in writing so that the cause of the loss is fully documented. These written statements will go a long way in proving a claim later.

Furthermore, an association cannot take too many pictures. Areas which may be affected by the oil should be diligently photographed both before and after the event. Before the oil comes ashore, areas which may be affected should be cleaned, if appropriate. Sand, lawns, etc., should be cleared as much as possible. It seems counter intuitive, but it is much easier for oil to be removed from clean areas than areas full of debris or other things.

Yet, self-help can be a tricky situation. The current position on what precautions an individual or association can take is unclear, but it seems unlikely that using sandbags or bails of hay in an attempt to absorb the oil would be a problem. Check with local officials about what is allowed or encouraged, and make sure not to interfere with the efforts of the local, state, or national governments. If and when you do take preventive actions, it is important to photograph the process, and anyone who is working on or observing the efforts should be asked to give a written statement.

Finally, any expenses incurred before or after the oil comes ashore should be documented. Keep receipts for materials and time logs for individuals who perform work. Anyone, including owners, volunteers, renters, or employees, should be compensated for their time and efforts in preventing or mitigating the damages. Keeping time logs can be very important to make sure that everyone is fully reimbursed for their time.

God willing, this oil will never reach the shore, but if it does, an association should have a plan in place to deal with such a situation. It is important to remember that even if the oil stays offshore and does not affect your area, money expended to prevent damages should hopefully still be recoverable. Again, accurate documentation now can be crucial in ensuring that you are properly reimbursed in the future.

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