The Role of Forensic Accountants After Business Interruption
For businesses affected by a serious business interruption – for example, a factory fire, one of which dominated the news back in May of this year following ‘a huge blaze’ at a national bread factory – the financial impact can extend far beyond the immediate cost of repairs.
To pursue a claim under a business interruption insurance policy, a business may need to assess and quantify losses, including loss of profits and other covered losses.
The financial loss assessment process, including the interpretation and application of the terms of the relevant insurance policy, can be complex. Insured businesses may require specialist support to ensure their losses are accurately assessed and presented through to settlement of the claim.
The Role of Forensic Accountants When Business is Interrupted
Accountants may be called in by insureds, loss-adjustors, or insurers to help in the assessment through to settlement of insurance claims, for example, for loss of profits under business interruption insurance.
The role taken may be that of independent expert adviser in the context of a commercial insurance claim subject to the terms of the applicable insurance policy agreement, and not a dispute in court proceedings.
In contrast, forensic accountants may be appointed as expert witness by a party, or by both as Single Joint Expert, in court litigation or (ADR) arbitration proceedings. This includes in respect of claims for business interruption loss of profits as well as a wide array of accounting expert issues concerning the quantification of financial damages and including accounting issues, share valuation and fraud.
Whilst the technical assessment may be similar in relation to the quantification of claimed loss of profits should the dispute before the tribunal in this regard be in the terms of the subject insurance agreement in the circumstances, the contexts and effective remits are significantly different. In particular, as expert witness the forensic accountant may be subject to applicable procedural rules which may impose on the expert amongst other things, an “overriding duty to the court […] to help the court on matters within their expertise…” (Part 35.3, Civil Procedure Rules).
At Wilder Coe, we have extensive experience of providing independent forensic accountant expert adviser services.
From business interruption insurance claims for loss of profits, through to expert witness services, we offer forensic accounting advisory services to support your organisation through a claim.
Contact our team today for expert forensic accountancy support.
