When & Why Do You Need a Forensic Accountant in an Insurance Claim?


Feb 17, 2021

Why Do I Need a Forensic Accountant for My Business Interruption Claim?

You may already know that your Business Insurance Policy has coverage for down time, also known as Business Interruption, but did you know most policies also have coverage for you to outsource a Forensic Accountant to help settle your claim if you do not agree with your insurance company’s settlement? Business Interruption claims can be devastating to your business. For example, your building may suffer a water main break resulting in major water damage to the space where your business operates. Now what? Can you relocate and still be operational? Can you remain on the premises while repairs are ongoing? How much revenue is being lost, and what additional expenses are you absorbing? Business Interruption covers expenses such as those to rent a new space or set up a temporary space to keep your business going. Let's dive into how can a Forensic Accountant help your business in an insurance claim.

So why would you hire a Forensic Accountant to help with your claim?

Doesn’t the insurance company have an adjuster that does this?

These are great questions. The answer is yes, however, Insurance Adjusters may not have the expertise in accounting or the time required for some complex cases. The problem is that you do not know how complex a loss could be until you are right in the middle of it.

It can be advantageous to consider choosing a Forensic Accountant to help navigate your Business Interruption claim because Forensic Accountants utilize other professionals to help gather necessary information - including bookkeepers, doctors, engineers, attorneys and underwriters. They will source a network of specific industry professionals to use their expertise in gathering and translating technical data to policy coverage, which will result in a fair settlement for you.

Real Life Example of How a Forensic Accountant Can Help Your Claim

WHO: Fast Food Restaurant - FRANCHISEE

WHAT: Water Damage to restaurant

WHERE: Water Main – Burst Pipe

WHEN: Business was closed for 6 MONTHS

WHY: Business Interruption claim due to loss of income


The insurance company calculated income loss over the 6-month time frame to be $70,000 in lost gross revenues.

The client decided to call his broker for advice - smart client, as his broker advised that the policy contains coverage for professional fees, and a Forensic Accountant was hired by the client as they felt this $70,000 settlement was not fair.


  • The insurance company assumed there was no further loss after re-opening, but there was.

  • The insurance company did not take into consideration a large annual event that was missed that would have generated substantial additional revenue

  • Continuing sales trend during closure was NOT considered

  • The franchisee is obligated to pay continuing franchisee and advertising fees regardless if they're open or if they're forced to be closed.


  • The client to receive $15,000 in extra expense coverage due to franchisee obligations and fees

  • Total of $140,000 was paid to the client (doubling the initial settlement from the insurance company)


Since the client called for escalation to his broker, and then used his “Professional Fees” coverage under his Business Interruption coverage to outsource a Forensic Accountant, they concluded that you cannot assume all Business Interruption claims will be settled fairly. If you feel your settlement isn’t fair, your insurance broker is your best path to start the conversation of using a Forensic Account. “Professional fees” coverage is included in your insurance policy for you to use for resources like this!

At Foxquilt, we want to help you understand your coverage better while simultaneously making the process of getting the right Business Insurance as simple as possible. We can assist you in finding tailored coverage for your unique business, and our team of insurance professionals will be available to support you at every point in your business insurance journey. Get started on your online quote today.

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