Can businesses collect lost revenue from gas line break?

A sign in the window at Creech Road Laundry alerts customers that they can wash, but not dry on Saturday, Nov 13. Although many businesses are adapting to the gas line break in Southwest Florida, they still stand to lose plenty of revenue if gas service is not quickly restored. Photo by Stephen Wright

Stephen Wright

A sign in the window at Creech Road Laundry alerts customers that they can wash, but not dry on Saturday, Nov 13. Although many businesses are adapting to the gas line break in Southwest Florida, they still stand to lose plenty of revenue if gas service is not quickly restored. Photo by Stephen Wright

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Restaurants cope with gas outage

Some close, others offer limited menu

— Although many businesses are adapting to the gas line break in Southwest Florida, they still stand to lose plenty of revenue if gas service is not quickly restored.

“It’s going to be a big number for everyone,” said Skip Quillen, a co-owner of Culinary Concepts, which runs Chops, Yabba’s and other gas-dependent restaurants in Lee and Collier counties.

But the question is, will businesses be able to collect lost revenue?

Many restaurants will first try to collect from their business interruption insurance, said Quillen.

As the name states, those insurance plans cover when businesses have to shut down.

Not all business owners are hopeful that insurance will come through.

Phil McCabe, who owns the Inn on Fifth hotel in Naples, said he called his “loss of income” insurance company this morning, but a representative told him the gas outage wasn’t covered in the plan since the source of the problem happened offsite.

Even for those hopeful about their insurance plans, there are limits to those reimbursements.

Depending on the plan, Quillen explained, businesses may have to meet a deductible or face ceilings on how much they can get reimbursed.

Quillen said one business may lose $50,000 in revenue, but only get $10,000 from his insurance.

Quillen said the business could hire a lawyer and sue for the other $40,000.

With the possibility of gas being out for days for some, there could be a drove of businesses lining up to sue after the losses are counted.

So who will pay?

After the BP oil spill in the Gulf of Mexico this summer, businesses that lost revenue could file claims for reimbursement against the responsible party: BP.

There are no reports yet of anyone lining to be the responsible party in Thursday’s explosion, though.

There could be at least two entities that lawyers may try to blame: TECO Gas, which operates the utility, and Posen Construction, whose employee was critically injured when he struck the gas main.

Responsibility could be determined with an investigation, some suggest, or it may happen through litigation.

A loss of gas service in Jupiter in May, also involving TECO, might indicate how tough it is for businesses to collect revenue losses.

A low pressure drop in a pipe caused a gas outage that affected at least 10,000 customers in the West Palm Beach area, some for as many as five days.

Like businesses in Lee and Collier discovered on Thursday night, no gas meant no service for some.

Olimpia Zuccarelli, owner of two restaurants in the Palm Beach Area, said she faced $15,000 to $20,000 in revenue losses after being force to close for two days.

But there was no pay out from TECO, she said, or the loss of income for her employees.

“The gas company did nothing,” she said.

It was determined that TECO was not to blame for the May outage, said Kirsten Olsen, spokeswoman for the Florida Public Service Commission.

Instead, the pressure drop was blamed on a lightening strike and labeled ‘an act of God’ with no responsible party.

Zuccarelli said she had interruption insurance, but that only covered a fraction of her losses.

Staff writers Jenna Buzzacco-Foerster and Eric Staats contributed to this story.

© 2010 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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