Claims for Lost Profits & Earning Capacity

If you have lost profits or income due to an oil spill, you may submit a claim for lost profits or earning capacity. Note that you can claim lost profits but not lost revenues.

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Example of Claim for Lost Profits & Earning Capacity

If your business is taking people on pleasure cruises around a harbor and an oil spill closes the marina where your boat is docked, you could submit a claim for the profit you lost during the time the marina was officially closed. However, you could not receive payment for the revenue you typically bring in during the loss period; rather, you could claim the only amount of profit you typically earn (i.e, what is left over after deducting expenses from revenue).

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Claim Requirements

To be valid, a damage claim for lost profits and earning capacity must meet the following requirements:

• You must be able to prove the damage was caused by an oil spill that falls under the Oil Pollution Act of 1990. (See the General OPA Claims Requirements page for more information.)
  • Oil must have caused the damage.
  • The damage must come about as a result of a discharge or substantial threat of discharge of oil.
  • The discharge or substantial threat of discharge must be to a navigable water of the United States.
  • The discharge or substantial threat of discharge must come from a vessel or facility.
• You must prove that your lost profits were caused by the spill and that the amount you are claiming is appropriate:
  • Document the property or natural resources that were damaged, destroyed, or lost, resulting in your loss
  • Show that your income was reduced due to the damage or loss of the property or natural resources and show by how much it was reduced
  • Show the amount of profits and earnings in similar time periods
  • If alternative employment or business was available, show what, if any, income you received from it
  • List savings to overhead and other normal expenses not paid as a result of the spill (e.g., commuting costs, utility fees)
• You must show that you have presented your claim to the responsible party of the spill, unless that party is not known or unless the NPFC has advertised for claims.
• The claim must be for a sum certain (specific dollar amount).
• You must submit the claim within three years of the date the damage was reasonably discoverable.
• You must submit the claim in writing and sign it.

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Examples of Supporting Documentation

You must provide evidence that supports your claim, and you can use whatever documentation you believe best supports that claim. Listed below are examples of documentation often submitted with property damage claims:

• Photographs
• Tax returns for loss year and previous three years,
• Income Statements for loss year and previous three years,
• Balance Sheets for loss year and previous three years,
• Cash Flow Statements for loss year and previous three years,
• Receipts or other proof of revenue combined with proof of expenses
• Reports from the Federal On-Scene Coordinator (FOSC), fire department, police, or other responder
• Information on Coast Guard or EPA notification
• Newspaper reports describing the spill
• Any other documentation you feel supports your claim

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How to Submit Your Claim

1. Develop a document or complete the Optional Claims form that describes your claim, including the dollar amount you are claiming, and sign the document in ink.
2. Attach supporting documentation, such as those listed above.
3. Mail your claims package to the NPFC.

ATTN: CLAIMS ADJUDICATION
NATIONAL POLLUTION FUNDS CENTER
US COAST GUARD STOP 7605
2703 MARTIN LUTHER KING JR AVE SE
WASHINGTON, DC 20593-7605