From the category archives:

business interruption

For Resorts Affected by the Oil Spill – The Loss May Be In The Mix of People Who Are Your Guests

by John June 1, 2010

Some resorts are reporting a business interruption and lost revenue due to room cancellations as a result of the BP oil spill in the Gulf. Other resorts along the Louisiana, Mississippi, Alabama, and Florida coast lines are not yet seeing a loss of business income because their rooms are still occupied–by people who are trying [...]

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How to Document Employee Time Related to a Business Interruption Insurance Claim

by John May 20, 2010

All reports from Nashville indicate that the city, its residents, and businesses are working towards recovering from the terrible flood.  Companies that experienced a business interruption loss due to the flood may choose to use their own employees to perform clean up and repairs to the physical facilities.  If your business is using its own [...]

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No Good Deed Goes Unpunished

by John May 17, 2010

I recently worked with a company that had a fire at their R&D location that resulted in a business interruption loss. Amazingly, they had an endorsement that covered their continuing expenses without having to identify a corresponding loss of revenue. The insured made every effort to mitigate the business interruption, including attempting to have some [...]

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Forensic Accountant John Hutson Talks To MSNBC About Business Interruption Issues Due to the BP Oil Spill

by Mary May 11, 2010

John was recently interviewed by MSNBC reporter Allison Linn. In her article As Oil Gushes Out, Damage Claims Pour In, John comments about what it will take to quantify a business interruption loss due to the Gulf Coast oil spill. As a follow up to that article, John wants corporate officers, risk managers, and business [...]

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Estimating Business Interruption Revenues Before and After the Nashville Floods

by John May 6, 2010

Thankfully the river waters are receding and Nashville businesses will soon begin the restoration and recovery process.  As a component of a business interruption claim, many businesses will be tasked with projecting their lost revenue due to the closure of their business.  Projecting lost revenue can be a confusing task for risk managers, corporate officers, [...]

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The Mainstream Media’s Impact on Gulf Coast Business Interruptions

by John May 4, 2010
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We live in a cell phoning, e-mailing, text messaging, Facebook-ing, Twitter-ing world.  Information travels at blinding speeds and can have an almost immediate effect on a business interruption due to the BP oil spill in the Gulf.  Right now the media, and their treatment of the Gulf of Mexico oil spill, is severely damaging businesses. I [...]

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British Petroleum Changing Its Tune on Business Interruption Claims

by John May 3, 2010
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Settling business interruption claims related to the recent oil spill in the Gulf of Mexico is not going to be as simple as British Petroleum made it sound.  Many businesses have been, or will be, adversely affected by this event.  These businesses may be making claims for their economic damages through: First party insurance. Oil [...]

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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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