Forensic accounting for insurance claims

Many business disputes involve a claim on some form of insurance policy, whether arising from property damage, negligence, protection against major expense or a wide variety of other events covered by insurance.

The team are familiar with the latest insurance industry practices and requirements and can apply our forensic accounting skills to quantify insurance claims involving business losses, loss of profits, damages and/or compensation.

An insurance claim may arise following an incident or event covered by an insurance policy. It is usually made by the policyholder, or on their behalf, to an insurance company with a claim for compensation for a loss or an event covered by the policy. Sometimes claims may be made by third parties for events covered by the policyholder’s insurance.

We are often asked to quantify insurance claims in specified areas on behalf of the insurance company. Once approved, the insurance company or agent on their behalf will issue payment to the insured, an approved interested party on behalf of the insured or a third party that has suffered the loss.

We have extensive experience of managing claims, quantifying losses and calculating loss of profits arising from events that have led to recoverable losses – for clients, insurance companies, Government bodies and other entities. We have dealt with losses arising from property loss, business interruption, professional liability, product liability, product recall, personal injury, file reviews, reserving and claims administration.

Areas where we can help with most insurance claims

We can support and provide assistance through each step of the claims process. We work with our clients to:

Collect evidence and prepare a preliminary assessment of the claim and the amount of the potential claim
Mitigate losses and resume operations as quickly as possible
Identify and track expenses incurred because of the insured event
Quantify any loss of profits arising from the insured event
Establish losses that are covered by insurance and those that may be recoverable by claims against third parties
Prepare claims for submission to insurers and third parties
Act as independent accounting experts when required for the purpose of court or arbitration proceedings.

Accountants negligence

We have acted in many cases involving negligence claims against professionals, particularly accountants. We have been appointed to review accountants’ files and establish whether there is evidence of negligence and its consequences. We are able to prepare reports for use in settlement negotiations. If the matters are not resolved, we are able to prepare reports for us on court proceedings. For further details click here.

Also, we have been instructed to estimate losses arising from alleged negligence by accountants and other professions, such as solicitors and surveyors. We may be instructed by the claimant, the professional firm or the insurance company. For further details click here.

Personal injury and product recall claims

We have acted in claims for catastrophic personal injury, such as where individuals will require constant care, supervision, loss of income, specially adapted housing, vehicles and other equipment, possibly for the reminder of their lives. These claims usually involve assessing the financial implications of advice provided by a wide variety of specialists and medical experts.

Product liability claims

We have particular expertise in quantifying losses arising from product liability and product recalls, and have dealt with many such cases, particularly in the food sector.

Case Study – Product Liability – Sudan 1 dye

Over 570 food products had to be cleared from supermarkets when they were notified by the Foods Standards Agency that the flavours used in various products were found to contained Sudan 1 dye. This dye was not suitable for human consumption. This was the biggest recall in British history, involving soups, sauces, crisps and ready meals, and estimated to cost about £100m.

Charles was requested by solicitors acting for the flavourings supplier’s insurers to prepare a forensic accountant’s report into claims by one particular food producer. Charles’ work resulted in 60% of the claim being rejected for a variety of reasons. The solicitors noted that without Charles’ extensive and thorough examination, parts of the claim might have gone unchallenged.

Charles also advised the insurer-client there was sufficient evidence to bring a claim against the supplier of the contaminated materials. Charles was asked to prepare a second report based on his original work in order to recover his insurer-client’s losses against the dye supplier’s insurers. Charles was able to gained the confidence of the forensic accountants acting for the dye supplier’s insurers, leading to recovery of the multi-million losses and costs incurred by his client with minimal additional costs. The client thanked Charles for “dealing professionally with a very special approach”.

Want to learn more about our forensic accounting services?

We would be delighted to hear from you and to discuss on a “without commitment” basis how we may be able to help you. Click on one of the icons to contact us, read testimonials or to read our case studies and judgments where we have given evidence.