forensic audits for natural disasters

Our Process

estimate for reserve and advance purposes. We also create a firm timetable outlining our responsibilities and the responsibilities of our client’s personnel with respect to data and document gathering. We prepare interim reports over our letterhead as soon as practical, and coordinate the work of auditors and other experts engaged by your insurer. We provide continuous consulting services to answer additional requests, advise management on the status of the claim, and assist in settlement negotiations. And, we always strive to ensure that your overall objectives are met.

The most common types of claims we prepare include:

• Business Interruption and Extra Expense
• Property Damage
• Cyber Attack/ Data Breach
• Product Recall / Product Liability Claims
• Event Cancellation
• Fidelity / Employee Dishonesty / Crime Claims

Business Interruption

Business Interruption coverage is intended to reimburse the policyholder for the income lost or incremental increase of expenses experienced during the loss period. This coverage is typically triggered by physical damage as a result of a covered peril or another trigger defined in the property policy such as Civil Authority, Ingress/Egress or Service Interruption. Contingent Business Interruption claims typically involve property damage or other covered peril at a supplier or customer location.

Though the application of this coverage may appear simple on the surface, measuring a time element claim is far from black and white. There are various methods of calculating business interruption and associated source material to substantiate your claim. Here is an overview of what you should expect when measuring your BI loss.

• Most records will be available when/if needed later, but      certain “live” documents, such as forecasts, that dynamically change, must be saved offline before they do. Be prepared to discuss the sources of information in the monthly operating statistics and financial statements
• Be prepared to discuss the specifics of your operations –      production process, location and capabilities of other facilities, etc.
• Organize documentation and calculations under the terms of  the policy so that a claim can be submitted in a timely manner; for larger losses, regular interim claims may be submitted to ensure cash flow

McKenzie forensic accounting firm that specializes in the assessment, quantification and presentation of losses to insurers. Insurance policies have become increasingly complicated and are challenging for all involved especially the policyholder. It’s more and more common to see overlapping perils, overlapping coverage extensions and overlapping interruptions, such as direct, contingent and/or service interruptions. Our objective is to relieve the time and resource burden on our clients while providing the expertise needed to achieve an equitable settlement creating a smoother process for all involved. We utilize our proprietary tools to enable forensic accounting efficiency and accuracy, while connecting multiple parties around the globe to help expedite claim settlement.

 Cyber Claims

Insurance claims arising from a cyber related peril have become more complex as a result on the various coverages that may apply. From a claim preparation perspective, cyber exposures falls into two categories: business interruption and restoration, and they are interrelated. 

Business interruption is a time element loss similar to that from a property trigger. When an incident occurs that affects operations and production, the loss of earnings that results may be covered. The time element considers the time of restoration i.e. time it takes to get back to pre-loss levels. This includes the extra expenses needed to keep the operation running. In addition to lost sales, there may be a loss of customers or contracts that should also be assessed.

The restoration involves both the costs and steps needed to repair and replace damaged hardware and software systems necessary to restore operations back to pre-loss levels. How long that takes is your period of restoration. Restoring critical systems may involve various outside consultants to implement the restoration plan and these costs should be included in your claim.

Choosing the right firm for your cyber loss can be difficult especially given the unfamiliarity most have with these claims. In our experience the claims process is similar to a property claim as far as documentation and calculations. However, getting access to the documentation and aligning it with the policy can be challenging. In the end, a well thought out and well prepared claim will make all the difference.