Five Claims Fit for Forensic Accountants

Article, Claims ManagementJuly 2013

Insurance / Financial Lines / Liability / Casualty / Property

Five types of claims in which a forensic accountant may be of particular value.

Without advocating for either side, forensic accountants look at the facts and context surrounding a loss event to provide an analysis and opinion of the measurement of losses incurred. Following are five types of claims in which a forensic accountant may be of particular value.

1. Business Interruption/Contingent BI.

Business interruption and contingent business interruption claims often have varying degrees of complexity depending on the insured’s type of business, the length of the interruption, and the environmental context within which the business operates. In a typical scenario, a forensic accountant will work with claims professionals and the insured’s representatives to gain an understanding of the loss event, determine the types of records that may be available, and work to determine the financial impact of the loss.

Forensic accountants may have specific knowledge and experience working with different accounting systems that an insured uses for recordkeeping, providing time-related efficiencies in obtaining records necessary to perform an analysis. Additionally, the forensic accountant likely will have specific industry experience useful in shortening or eliminating the “learning curve.”

2. Employee Dishonesty/Theft.

Since 2007, there has been an upturn in theft insurance claims across the country. When these claims are filed by an insured, the carrier must evaluate the documentation provided in support of the claim and determine if it is sufficient to issue a payment or whether further review and/or documentation is required.

These types of matters are usually document intensive. A forensic accountant can assist with the management and evaluation of documentation, digging through the paperwork, and providing the facts of a claim. The investigation and evaluation of these claims also often requires the determination of the scheme perpetrated by an employee, which is meant to be concealed. It takes an in-depth knowledge of accounting theory and financial systems in order to discover the methods or amounts involved that may have been misappropriated. Forensic accountants are trained for this type of situation; to look beyond the surface, get behind the numbers and investigate the origin and severity of the loss.

3. Construction.

The construction industry is a complex world, and there are many places within this multifaceted environment where events could potentially jeopardize an entire project.

The complexity of a construction project can make it difficult for claims professionals unfamiliar with the industry to evaluate and value a claim. Engaging an experienced forensic accountant on the claim can provide specific knowledge of industry practices, including construction schedules; contractor and subcontractor agreements; project budgets; and supplier agreements.

Due to the variety and volume of project documents, the claims handler may not have the time to dedicate to the review of larger claims. A forensic accountant can assist in the management of project documents and also will likely have knowledge of the financial and tracking systems used in accounting for projects.

4. Property.

Forensic accountants can assist in the valuation of damaged assets, such as inventories, machinery, and equipment. With property damage claims that can run the gamut of value and complexity, claims handlers often can be inundated with information. Documentation supporting this type of damage can be voluminous and may often be submitted under different claims classifications than what is required by the policy. Forensic accountants can assist in assembling the large quantities of information provided, verifying amounts presented in the supporting documentation, and assisting in the proper categorization of charges into different classification “buckets,” as instructed by the claims professional.

5. Liability/Third Party.

Liability and third-party claims often bring their own set of unique issues. Dealing with third parties or claimants is sometimes a completely different experience than dealing with first-party representatives. Third parties are usually hesitant to provide financial documentation or tend to provide limited documentation for analysis. In these situations, a forensic accountant should be able to assist in preparing an analysis with limited information, supplementing it with industry reference data from multiple sources.


Tim Voncina, CPA, CFF, CGMA, is a partner in the Chicago offices of RGL Forensics. He has been a CLM Fellow since 2010 and can be reached at


As appeared in Claims Management, July 2013.


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