From the monthly archives:

April 2010

The Effect of a Revenue “Heartbeat” in a Business Interruption Loss

by John April 29, 2010
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It is usually in the best interest of the insured, and the insurance company, for the insured party to mitigate a loss of revenue when there is a business interruption loss. In many cases, that mitigation is easily noticeable in a financial or graphical analysis, such as occurs in the example below. I call this [...]

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The Meaning of the Word “Incurred” in Accounting

by John April 26, 2010

Whether you love or hate Bill Clinton the man did give us some timeless entertainment–my personal favorite is his rationalization of the word ‘is.’ It was hilarious to watch this mis-guided logic play out on CNN, but it’s not so funny when the same type of flawed thinking is applied to a business interruption calculation. [...]

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Is it a Saved Expense or is it a Witch?

by John April 21, 2010
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I love the Monty Python skit where a mob of peasants wants to burn a woman for being a witch. When the person making the decision asks, “How do you know she is a witch?” The crowd responds, “She looks like one!” Such is often the case with saved expenses in a business interruption claim. [...]

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Contingent Business Interruption Loss? Establish a Timeline for Reopening at the Beginning of a Client’s Loss

by John April 19, 2010

Contingent business interruption coverage can be critical for a company that has a few key clients that generate a significant percentage of the revenues. Normally, a contingent business interruption calculation is no more or less difficult to deal with than any other business interruption loss. The loss is measured based on the period of restoration, [...]

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Does This Fraud Scenario Sound Familiar to You?

by John April 16, 2010
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I hate to read articles like Businesses are Prey to Embezzlement from the Atlanta Journal Constitution. I hate it because the events that unfold in this article lead to a result that is unnecessary and make me sound like a broken record. I understand that business owners are reluctant to spend a few thousand dollars [...]

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How to Project “Erratic” Sales for a Business Interruption Calculation

by John April 14, 2010

Projecting sales “but for” a loss incident is often one of the first things I do when I calculate a business interruption loss for an insurance claim. Quite often, I have the benefit of using an identifiable historical trend to provide the basis for my projections. Every once in a while, though, I run across a stable [...]

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Submitting a Construction Delay in Completion Insurance Claim? Don’t Forget the Adverstising

by John April 12, 2010

When a construction project is delayed due to an insured incident, there is an enormous amount of information that must be tracked immediately. Some of the bigger ticket items are interest expenses, refinancing costs, and property taxes. One often overlooked item is advertising. I have worked on several apartment and condominium properties that created a [...]

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Schools Should Plan For a Reasonable Extended Period of Indemnity

by John April 7, 2010

Schools have several aspects that make them unique risks when evaluating values at risk for a business interruption loss. One of the areas that separates schools from other industries is that there is often a huge lag, or ramp up, for the school to repopulate following a major disaster. I’ve recently heard from brokers who [...]

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Use a Certified Fraud Examiner to Review Business Partner Expense Reports

by John April 5, 2010

When you’re a business owner, your business partner can be your best friend or your worst nightmare. Your business partners are the people you should be able to trust the most, because they are the individuals who stand to lose or gain the most if the business fails or succeeds, right?  So why would an owner steal [...]

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