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Indirect victims of oil spill are on their own

TALLAHASSEE — Enticed by the sugar sand shore, flocks of tourists arrive at Maria Patti's fish shop in Milton each summer for mullet and shrimp pulled fresh from the nearby Gulf of Mexico.

In turn, Patti helps keep a roof over the heads of the local fishermen who bring in the salty hauls. But if the strips of saffron oil ribboning across the gulf continue their glide toward Florida's shores, Milton's economic engine could soon come to an abrupt halt.

"I have cried because I am going to have to close my doors," said Patti, who fielded calls from loyal customers all week worried about the future of Southern Seafood, her family-run business.

Fisheries, marinas, boaters, hotels, seafood restaurants, fishing equipment suppliers, tourist attractions and property renters across the state are bracing for what could be the state's next great economic crisis.

Oil spill insurance coverage is unheard of, painting a gloomy future for businesses that might have to foot the cost of rebuilding their companies if marine-driven profits drop.

Unpredictable and occasionally unprecedented, environmental disasters are generally excluded from insurance coverage, especially in cases where the loss is tied to intangible causes such as environment-wary consumers or a product drought, said Lynne McChristian, Florida representative for the Insurance Information Institute, a New York research center.

While many insurance providers offer coverage for temporary disruptions, those are usually tied to property damage, McChristian said.

"So if there is not a direct physical loss to the structure, business interruption coverage does not apply," she said. "The reason is because something like this is hard to plan for. It is hard to price and what insurance rates are set on is what has happened in the past."

Dozens of Florida businesses have begun to feel the first tremors of economic disaster. Hotels and property renters point to a flurry of reservation cancellations. In the Panhandle, fishermen are staying home, unsure if they are legally allowed to put out bait.

In recent days, nearly a dozen Florida businesses have taken legal action against BP, the company behind the damaged oil well in the Gulf of Mexico responsible for the spreading slick.

"I am afraid it is going to put some people under," said Robert Cunningham, a Mobile, Ala., lawyer representing five cases recently filed by business owners against BP.

May is usually the busiest time of year for the Ocean Reef Resorts, a property renter in Panama City Beach and one of the plaintiffs represented by Cunningham.

"Our staff has been on the phone from the time we open to the time we close with people canceling their reservations or people wanting to make a reservation but reluctant to do so," said owner Tim Taylor.

In a statement, BP said it was "committed to pay legitimate and objectively verifiable claims for other loss and damage caused by the spill … including loss of earnings."

In South Florida, some business and government officials have only begun to discuss what the spill could mean for the local economy.

In Miami Beach, business leaders were scheduled Tuesday night to discuss an action plan.

"Miami Beach being a tourist community, it would be absolutely devastating. Hotels, restaurants, you name it, the stone crab industry, they would all be wiped out," said Vice Mayor Jerry Libbin, president of the local chamber of commerce. "We know it is not a matter of if, it is a matter of when."

The U.S. government could provide some immediate relief.

Carol Chastang, a spokeswoman for the federal Small Business Administration, said Gov. Charlie Crist could submit a request asking for a disaster declaration. As of Tuesday afternoon, Crist had not made such a request, said Chastang.

If Florida is approved, small businesses in areas ravaged by the oil spill would be eligible for low-interest loans of up to $2 million to cover basic operating expenses.

Cristina Silva can be reached at (850) 224-7263 or csilva@sptimes.com.

Indirect victims of oil spill are on their own 05/04/10 [Last modified: Tuesday, May 4, 2010 10:11pm]
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