THE POLICYHOLDER'S ADVOCATE®
“If the gloves don’t fit, you must acquit” – Johnny Cochran
Many forensic accountants have noted that the Generally Accepted Accounting Principles (“GAPP”) focus on business valuation formulas that are more suited for commercial transactions than for determining the amount of business income loss. Businesses also have different styles of bookkeeping, which can create challenges in finding the necessary data to support a claim.…
Business income claims are not very emotional or passionate. Jurors will not get to weigh the credibility of wild and intriguing witnesses or examine the conclusions of a forensic medical examiner who will explain how a person died. These cases are dry and forensic accountants can only be so entertaining. Notwithstanding the dull topic, the role of a forensic accountant in a business income claim is very similar to the role of the medical examiner in a murder case: a business is dead or seriously injured and the jury needs to know the cause. It is always important to rely on experienced forensic accountants to assist the insured in this dry process.
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Continue Reading Too Much is Never Enough – Understanding Business Interruption Claims, Part 95
Insurance carriers are quick to deny payment for services rendered by accountants or consultants in connection with the presentation of a business income claim. The number one reason given not to pay is that there is no specific language in the policy obligating an insurer to pay for such expenses. In a previous post, Passing the Accounting Bill – Understanding Business Interruption Claims, Part 19, I explained that a careful reading of the applicable coverage forms may support payment for these expenses.…
The proper determination of more significant oil spill commercial lost profit and earning capacity claims must be approached very similarly to business interruption catastrophe claims. The best approach for larger or more complex claims is through a team of specialists. A business client can only be properly represented and fully indemnified through a collegial debate and analysis developing the proper assessment of the business, the circumstances resulting from the catastrophe, the amount of the loss, and legal considerations of what the law will allow and require as proof, if challenged.…
I receive a fair amount of private emails regarding certain posts. Yesterday, I received about fifty saying that this Blog was “down.” Thanks. This blog is hosted by LexBlog and this was their explanation:
The issue, arising out of the software interfacing with our cloud server environment was identified, and repaired. We do not expect any continuing service disruptions. Your blog content was not at risk during this down time nor is it at risk at anytime. All of your work is completely backed up.
Your blogs on the LexBlog Network are hosted in a cloud environment developed and operated by LexBlog on the Amazon Elastic Compute Cloud (Amazon EC2). Amazon EC2 is widely recognized as a highly reliable environment and allows LexBlog to provide you with 99.99% uptime.
Every “cloud” has a little rain, and LexBlog has been an excellent service for us and our readers. So, I do not expect this to happen with any frequency. Sorry for the frustration.…
Continue Reading Broken Tile Claims, Oil Spill Issues and Internet Problems
The tragedy of loss of human life and damage to the environment when discussing the BP Oil Spill cannot be overstated. The important role that accountants and business interruption experts will play helping prove financial loss cannot be overstated either. Experienced professionals like Bob Glasser, noted in yesterday’s Are Lawyers Pandering for BP Oil Spill Clients Going to Get Sued for Malpractice in Follow-up Class Actions? A Guest Blog Regarding Business Claims By Bob Glasser Explains and Guest Blogger Bruce Smith, who wrote The Forensic Accountant’s Role In Business Interruption And Business Income Claims, should be in high demand from businesses and entities that lose revenue and income as a result of this oil spill. Attorneys presenting these lost income claims should consider hiring such individuals as consultants and financial expert witnesses.…
(*Chip Merlin’s Note–Bruce D. Smith is a certified public accountant and certified fraud examiner, whose firm’s focus since its founding in 1992, has been forensic and investigative accounting for the insurance industry. He has been involved in claims in both catastrophic and non-catastrophic environments and has been engaged by both insurers and policyholder and their respective representatives. I invited Bruce to write a guest blog on this aspect of business income loss.)
What is a Forensic Accounting?
The Association of Certified Fraud Examiners (ACFE) explains that, “Forensic accounting is the use of professional accounting skills in matters involving potential or actual civil litigation. The word “forensic” is defined by Black’s Law Dictionary as “used in or suitable to courts of law or public debate.” More simply put forensic accounting is litigation support involving accounting.…
Continue Reading The Forensic Accountant’s Role In Business Interruption And Business Income Claims
