Hiring qualified experts to assist policyholders in the presentation of a business interruption claim is a sine qua non condition for success. An expert’s inexperience or poor work product could cause irreversible damage and destroy any viability of what would have been an otherwise valid claim.

Manpower Inc. v. Ins. Co. of Pennsylvania, 08-C-0085, 2011 WL 3904643 (E.D. Wis. Sept. 6, 2011) is a horror story and a lesson to all coverage practitioners.

Manpower, Inc., leased office space in a building located in Paris, France. The building sustained a collapse loss and the collapse caused an interruption in Manpower’s business. Manpower filed a claim for business interruption coverage with its insurer, but the insurer denied the claim and Manpower filed a lawsuit. During the lawsuit, the court decided that Manpower was entitled to business interruption coverage and the only issue before the jury was the amount of the business interruption claim.

Before the trial, the insurer moved to strike Manpower’s accountant under Federal Rule of Evidence 702 (aka Daubert Challenge), claiming that his opinions and formulations were unreliable and therefore inadmissible for trial purposes. The court agreed with the insurer and did not allow Manpower’s expert to testify. The insurer then claimed that without an expert, Manpower could not prevail and that the case should therefore be summarily adjudged.

Manpower’s attorneys advised the court that they would use the insurer’s experts to prove the amount of the loss, a move not recommended for those with heart conditions. To complicate matters, Manpower was not able to compel one of the insurer’s experts to trial so the court had to decide the issue by looking at the deposition transcripts and expert reports.

In reviewing the reports the court found that the insurer “recommends” that the carrier pay no more than €399,821 to Manpower in connection with the claim. Manpower intended to offer this recommendation at trial as to the amount of the business-interruption loss.

The court, however, did not accept the recommendation as a reliable and admissible expert opinion that could have been presented to the jury to support Manpower’s claim.

A fundamental problem for Manpower is that Lewis’s “recommendation” is not an opinion that would allow a jury to reasonably determine the amount of Manpower’s loss. In the report, Lewis makes clear that he does not have enough information to express an opinion as to the amount of the loss and that therefore he can do no more than critique the calculations performed by Herr Experts and Sullivan. His “recommendation” is merely that—a recommendation to ISOP about how much to pay in connection with the claim in light of the limited information then available. Although this recommendation is an opinion, it is not an opinion that meets the requirements of Federal Rule of Evidence 702, and ISOP never intended that it serve as one. Indeed, Lewis explicitly states at various points in the report that he does not have sufficient facts or data to render an opinion as to the amount of the loss. Moreover, during his deposition, Lewis repeatedly states that he does not have an opinion as to the amount of the loss.

Manpower points to an excerpt from the deposition in which Lewis is asked about his “determination” of the amount of the business-interruption loss based on certain assumptions. Manpower argues that in this excerpt, Lewis is offering an opinion as to the amount of the loss. However, even if he were, that opinion would be inadmissible under Rule 702 because it is merely the “recommendation” discussed in the previous paragraph, which was not based on sufficient facts or data. Moreover, the cited excerpt appears after Lewis testified that he had no opinion as to the amount of the loss, and thus the full context of the deposition makes clear that Lewis was simply discussing the conclusions he drew from the limited data, not changing his earlier testimony and offering an opinion as to the amount of the loss.

Experts involved in the determination or calculation of a business income claim should be precise in their calculations and be able to support their conclusions with reliable and readily acceptable facts. An opinion without a factual basis is unreliable and inadmissible for trial purposes and worthless in the time of need.