By: Jeff Esper | November 20, 2018

Claim preparation is as much about being prepared, as it is the information you are preparing. Knowing ahead of time what the final claim should include will help expedite the process and avoid delays or loss of recovery. 
  • As to format, all claims prepared internally by the business should:   
  • Contain a comprehensive index 
  • Include thorough explanations of unusual circumstances and events 
  • Be easy to understand and evaluate 
  • Provide maximum supporting documentation   

The following generalized content is suggested for all claims:  
  • A brief narrative providing the factual background of the loss, the effects on assets and businesses, and the basis of loss calculations. The narrative can be several paragraphs in length to many pages, depending on complexity. But stick to the facts! 
  • A schedule entitled Summary of Loss listing losses by coverage type (Property Damage Repair Cost, Inventory Loss, Business Interruption Loss, Extra Expense Loss), and the total of all losses sustained. 
  • A schedule summarizing each loss by coverage type. These schedules should roll up to the Summary of Loss, and provide the mechanical calculation by component. For example, the property damage loss summary could include a summary of all invoiced charges, stores issues, internal labor, internal engineering allocations, and other sundry expenses. The business interruption loss summary could include the number of lost production days, calculated average production per day in units, the average sales value of lost production, the amount of non-continuing manufacturing cost, and expenses incurred to reduce an otherwise greater BI loss. 
  • Detailed schedules supporting each amount appearing in the summary schedules. For audit purposes, each number appearing on the summary schedules should be supported by a subsidiary calculation. For example, the vendor invoice component of a property damage claim could be supported by a detailed listing of each invoice charged to repair cost work orders, including the vendor name, invoice number and date, purchase order number, description of the service performed or material sold, and amounts paid. The average production per day statistic utilized in a business interruption claim could be supported by a listing of historical monthly production quantities, days worked, and a delineation of the base period utilized to compute the projected quantity per day. 
  • Source documentation providing further support of claimed amounts. In theory, every number appearing in the claim should be supported by the appropriate financial statements, subsidiary reports, or other source documentation used in the calculation. This is not always possible, but every reasonable measure should be taken to support the claim with business books and records. As such, any numbers that are not well documented will receive the greatest scrutiny during the adjuster’s review.

By: Jeff Esper | October 31, 2018

Think Backwards, Sideways and Forward

Business Interruption coverage is intended to reimburse the policyholder for the income lost or incremental increase of expenses experienced during the loss period. Though the application of this coverage seems straightforward on the surface, making a claim for business interruption is far from simple. In this article, we’ll walk you through what is covered under business interruption and how to think through a BI claim.

Let’s start with how coverage applies by reviewing what is and is not covered:

  • Insured for the Actual Loss Sustained, or the overall permanent economic loss to the company;
  • Not insured for temporary delays in shipping product to customers;
  • If a manufacturing business is operating at capacity, maintains normal levels of inventory, and has no ability to make up lost production, an actual loss is highly likely;
  • Insured for the time required to repair or replace damaged property, so long as repairs are conducted in a commercially responsible manner;
  • Also insured for any expenses incurred to reduce the business interruption loss, so long as the expenses do not exceed the amount of loss they prevent;
  • Potentially insured for consequential sales losses and market share losses for a period following the resumption of normal operations;
  • If another business group under this policy is dependent upon your business as a supplier or customer, that potential loss should become part of your exposure scenario.
  • Extra expenses incurred to operate as normally as possible during the period of restoration of damaged property are also covered.


In identifying all potential exposures it is common to encounter the uncommon. Repairs to damaged property, production losses, and major extra expenses are obvious to everyone. It is the less-obvious exposures, usually with respect to business interruption, that must be identified to achieve maximum recovery.


Think Backward How are supply functions affected by the loss? Will take-or-pay contracts expire? Will we lose volume discounts? Will other divisions be forced to take downtime because of our loss?


Think Sideways Are some of our customers now being served by other insured locations at excess production cost or freight penalties? Have engineers helping in our repair effort been forced to delay other projects that are expected to result in significant savings of operating costs?


Think Forward Are we losing profit at downstream converting locations that we can no longer supply? Have we lost our position as sole or primary supplier to a key customer? Were productivity improvements delayed?


Not every area of potential loss will be covered by insurance, but it is best to identify all known effects as soon as possible and sort out policy responses later. Unusual loss exposures may require unusual documentation. The more remote the problem the more difficult the reconstruction of events at a later date.


It is essential that all potential exposures be identified as soon as possible after the loss. Initial loss estimates established by the adjuster are of great importance, and every effort should be made to assist the adjuster in preparing an accurate, sustainable estimate.


When property damage is the trigger, a file should be maintained listing each major category of damage and a corresponding estimate of the loss. As new exposures are identified, and as better estimates become available, the list can be updated. The purpose is to facilitate response to the inevitable requests for information on the status of repairs, production, and excess costs.

By: Jeff Esper | September 24, 2018

Depending on how it is described in your policy, the percentage deductible will likely depend on the accuracy of your reported annual business interruption values at each location. This can become a huge issue and will require a proper business interruption assessment at all impacted locations to establish the total insured value, TIV. 

The initial goal is to determine which locations will breach deductible - a factor of the number of days operations are down and the TIV at each location. The length of time the facility is closed that results in a direct business interruption loss may be a consequence several triggers such as evacuations, service interruption, “ingress to” and “egress from” the insured property along with physical damage to insured property. Once this information is understood from a high level stand point, then we need to confirm the appropriate percentage deductible with Risk Management. 

There is a short cut to help determine if the time element loss exceeds the percentage deductible. Take the percentage deductible and multiple by 365 days to determine the number of downtime days that need to be exceeded in order to breach the deductible. This method is only used as an initial step to help determine if there is a net recoverable loss. A formal calculation will still be required to substantiate your findings. 

Here is an example of a scenario we dealt with from Harvey and how we used the secret method. Our client had a manufacturing facility that was shut down for 14 days due to a covered peril and the applicable percentage deductible was 3%. Using this formula, the downtime would have to exceed 10.95 days to breach the deductible leaving the value of 3.05 days as the net recoverable loss. With this method, you can quickly determine which locations need further analysis. 

This shortcut is most useful for businesses that operate 365 days per year with a string demand for all products manufacturing or services performed. It does not consider any loss mitigation efforts that may shorten the net recoverable period and it should not be used for the time element loss estimate or claim submission. The time element estimate and claim should be calculated in accordance with the applicable business interruption loss and percentage deductible wording in the policy.

By: Jeff Esper | June 14, 2018

What is Time Element coverage?  
A property insurance term referring to coverage for loss resulting from the inability to put damaged property to its normal use. This type of coverage is called "time element" insurance because the amount of loss depends on how long it takes to repair or replace the damaged property. The best-known types of time element insurance are business interruption and extra expense coverage. 

Time Element coverage is intended to reimburse the policyholder for the income lost or incremental increase of expenses experienced during the loss period. To trigger this coverage a policy must have suffered physical damage as a result of a covered peril or another trigger defined in the property policy such as Civil Authority, Ingress/Egress or Service Interruption. 

Though the application of this coverage may appear simple on the surface, measuring a time element claim is far from black and white. There are various methods of calculating business interruption and other intervening factors such as property damage decisions that give these claims a shade of grey.

Calculating Time Element - Gross Earnings vs Gross Profits 

At a high level, the two primary approaches to quantifying business interruption involve very different information. Gross Earnings offers two methods of measuring the loss, net sales value of lost production or total net lost sales, minus any saved expenses such as raw materials, material parts, supplies, utilities, and ordinary payroll during shutdown (with some exceptions). Gross Profit measures the loss simply by applying the business’ historical gross margin to the total loss of sales. Each option must be backed by supporting documentation and the rational behind it’s use.  

It is common for forensic accountants to run calculations using two or three methods and evaluate the results. This technique avoids surprises from the audit process and reveals the best representation of the loss. Sophisticated Excel macros are used to build the schedules customized to the policy terms and the policyholders financial documentation.

Documenting Business Interruption
The following list will be necessary to document and support a time element loss.
  • Estimated period of interruption for any site shut down due to the event, inaccessible due to ingress/egress blockage, civil authority orders, or service interruption. 
  • For any warehouses, distribution centers, store locations or other sites reporting potentially lost sales, provide: 
    • Twenty-four months of actual sales history by location (or as close as is available). 
    • Twenty-four months of income/P&L statement or profit contribution for each location (or as close as possible). 
    • Twelve months budgeted or forecasted sales prepared before the loss to depict anticipated sales and/or production (E.g., a plan projection prepared for the previous year and projecting sales for throughout that year and extending at least through 2Q of the next year if available). 
  • Track Actual Post-Event Sales from the start of the loss event through period of full recovery of operations and for a period of at least 6 months AFTER full recovery to look for any “make up” sales bump. 
  • Any affected Manufacturing Facility should provide similar documentation for production loss (i.e., 2-years historical production levels; most recent projected production estimates prepared prior to the loss event; and actual production from the start of the loss event until 6 months after full recovery).

Category: Insights 


By: Jeff Esper | April 20, 2018

Managing Cyber Exposures from the Inside Out

Many companies are perplexed by trying to understanding their cyber exposures. They may understand the risk and the potential impact of a breach, but they simply don’t know how to measure the total exposure to the bottom line.  Some of the costs associated with a cyber attack are not so bad, such as the linear calculations based on the number of records with personally identifiable information, PII. Take the current costs for credit monitoring, notifications, cyber forensics and legal fees, then add them up and you have pretty good idea of the exposure. But what if your business doesn’t have a significant PII exposure? How do you quantify the more intangible side of the risk?

You will not find that answer anywhere outside of your organization. The answer comes from looking within your organization. We call it “managing risks from the inside out.” Any cyber insurance expert will struggle to tell you what limits you should buy because there are no benchmarks to reference and no comparative studies that reflect the inner workings of your operations. The analysis of this exposure is possibly the most complex of any exposure to an enterprise, but it is precisely what needs to be done.

The enterprise wide exposure from a cyber related peril falls into two categories: business interruption and restoration, and they are interrelated.

  1. Business interruption is a time element loss similar to that from a property trigger. An incident occurs that cripples production causing a loss of earnings. The time element considers the time of restoration i.e. to get back to pre-loss levels. This includes the extra expenses needed to keep the operation running however possible. In addition to lost sales, there may be a loss of customers or contracts that should also be assessed.
  2. The restoration involves both the costs and steps needed to repair and replace damaged systems to restore operations back to pre-loss levels. How long that takes is your period of restoration. Restoring critical systems may involve various outside consultants to implement the restoration plan and should be factored in to the analysis.

Figuring out these scenarios and adding up the the costs and impact on earnings will go a long way to quantifying your exposure. Since many deductibles are based on a waiting period, this is vital procedure before looking for coverage. To get realistic Cyber BI Value you must consider the realistic, worst case, loss scenarios, known in the property policy world as Maximum Foreseeable Loss (MFL) and the more likely Probable Maximum Loss (PML). If you have security testing protocols in place and have done an impact analysis for critical systems, you have the foundation for quantifying the bottom line exposures.

Cyber claims are some of the most difficult to document, because in many cases records are lost and systems for record keeping may be unusable. The inefficiencies and manual processes not only affect operations, but will also affect claim preparation.

At RWH Myers, we have decades of experience quantifying an array of time element losses including those from cyber perils. We look at cyber as we would any other trigger because the fundamentals are the same. Our claims experiences help clients both understand all financial exposures associated with a cyber event and how to maximize claim recovery.

By: Jeff Esper | February 01, 2018

At RWH Myers, we often describe what we do as “claim preparation,” which refers to the tangible part of what we do, but there is so much more to our craft. When you have a "big claim," like the many companies that were impacted by recent hurricanes and wildfires, insurance placements are expected to respond. But just because you have a policy doesn't mean your claim will be prepared properly, quantified accurately and paid quickly. It depends on the preparation and execution of your claim team.

Bill Belichick, the Head Coach of the New England Patriots, has won more super bowls than any other coach. Whether you’re a fan or not, you have to appreciate the results of his leadership. His famous mantra is "do your job!" It is simple yet profound, and it's relevant to success in any team endeavor. Belichick preaches it over and over because he knows that winning is dependent upon each player doing their job, the right way. Nothing more. Nothing less.

A claim team should function much the same way, but the preparation can begin even before an occurrence. Having a skilled team with defined jobs and being well prepared to execute, plays a vital part in winning a big claim. Let’s explore the many jobs there are to do during the claim process and consider how preparation and execution may influence the final outcome.

  1. Communication - At the center of all communication should be a risk management professional who understands the insurance policy, the personnel and the goals of the organization. It is important that the flow of information and communication is managed at all times. Nothing should be shared or said without this person knowing about it. 

  2. Coverage Interpretation - Brokers and attorneys are available to interpret coverage and should be leveraged to assist risk management in resolving any coverage disputes. Policy interpretation is necessary to determine how coverage applies and how deductibles are to be calculated for each cause of loss. It doesn’t matter how well a claim is prepared until all coverage issues are resolved.

  3. Information Gathering  - There will be many requests for information and someone inside the organization should be assigned to produce all necessary information to adequately document the loss. This will be a daunting task due to the shear volume of data that will be necessary to prove the loss, but the burden will be lessened under the direction of an expert claim preparer.

  4. Strategy - By definition, strategy means “a plan of action or policy designed to achieve a major or overall aim.” The plan of action defines "who" will do "what" and in what time frame. Having experienced claim specialists on the team to set the standards of performance and to anticipate obstacles will keep the claim moving forward toward the goal.  

  5. Technical - For property losses, there may be conflicting opinions about the extent of damage, such as whether something can be repaired or needs replaced. Policyholders should have technical experts on the team to evaluate the property or equipment in question and to work towards an agreeable solution.
  6. Quantification - Measuring the impact on earnings is a business interruption accounting exercise that encompasses an understanding of the company's business, it's operations and time element insurance. Calculations will be audited by a forensic accountant that works for the insurer. To achieve a level playing field, an independent forensic accountant is well-suited to quantify the loss on behalf of the insured.
  7. Documentation – It’s the policyholder’s duty to make their claim to their insurers. The claim package should consist of summaries, listings, source documents, invoices, costs and calculations. All claims will be met with adjustment scrutiny. A well prepared and properly supported claim will deter opposition and settle faster.  

The amount recovered from insurers will be determined by how well everyone does their job.  If there is any confusion on your claim team about what to do, who should do it and when it should be done, it will influence the outcome. With the right team, all doing their job, you’ll have the best chance to win the big claim and enjoy a fast and fair recovery.

If you incorporate this concept into your claim approach, the next time you are in a big claim, the outcome may not involve confetti, but you will be recognized for a job well done!

By: Jeff Esper | December 08, 2017

RWH Myers is a professional loss accounting firm that specializes in preparing claims for FEMA and commercial insurance matters. Having decades of experience in handling catastrophic property damage claims, RWH Myers has been through the process of assisting organizations with financial recovery in the aftermath of every catastrophic event in recent history. We dedicate our entire practice to assisting those faced with losses as a result of these events.

Our goal is to help prepare your FEMA claim in an expedited manner so that you can get back to business and are reimbursed for your losses as soon as possible. November's Insight explains the process and what you need to know to recover losses from FEMA.

If you have any questions or would like a PDF version, just reply to this email. We are happy to help you! 

FEMA Claims - Preparation and Management 

When the Federal Government declares a State of Emergency, individuals and organizations in the affected areas can make claims to the Federal Emergency Management Agency (FEMA) for property losses under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. This Act is intended to provide financial aid and services to residents, public entities and Private Nonprofit organizations in the disaster area for losses not covered by insurance, such as deductibles. 

Any qualifying entity or individual is allowed one claim per declared disaster, which should include losses from all relevant locations. Only when more than one disaster is declared is a separate filing required. During a declared disaster, any organization that has sustained property damage in the disaster area may be able to recover a portion of their losses from FEMA. It is important to gather information and prepare claims according to both FEMA guidelines and the property policy as the incident unfolds. Insurance companies may involve FEMA experts, aka FEMA adjusters, to help policyholders file a claim with FEMA. Requirements are different and specific for FEMA claims and will be reviewed by a Public Assistance Coordinator (PAC). The Insurance adjusters will work as normal with the property claim made to the insurance company. 

RWH Myers’ loss accounting team works for the insured to maximize recovery from your insurers and FEMA claim submissions. We quantify and document the loss for optimal recovery in accordance with both the insurance policy and FEMA guidelines. Knowing how to handle claim preparation during a declared disaster brings order to a chaotic situation by reducing the time, effort and aggravation of a complicated claim process. For both claims, we will work with the assigned adjusters to ensure the claims are properly documented for each type of recovery.  The FEMA claim service we provide includes the following:  

  • FEMA application process 
  • Accounting methods to capture event related losses 
  • Allocating expenditures per insurer and FEMA requirements 
  • Preparation of worksheets including debris removal, code upgrades, emergency protective measures, and permanent and replacement work 
  • Integration of the insurance settlement amounts into the FEMA recovery formula 

Seeking recovery from FEMA requires a unique level of detailed documentation for submission in accordance with FEMA's forms and worksheets. Often times a FEMA claim will continue for years after the first party property claim is settled while the final physical damages are repaired and our client seeks reimbursement for out-of-pocket expenses. Our accounting fees may be included as part of your FEMA claim, just as they are with insurance.With time, patience and the right help it is possible to recover your losses, whether from insurers and/or FEMA. 

Let us help you by taking care of your claims, so you can focus on taking care of your organization. 

Category: Insights 

Tags: Claims 

By: Jeff Esper | September 15, 2017

After Hurricane Andrew in 1992, percentage deductibles became more popular in policies as a way to reduce the exposure to insurance companies. In a typical claim, you will know what your deductible is but with percentage deductibles you may not know until after your loss is calculated. A common misconception is that the percentage applies to the loss sustained when in fact the percentage deductible is a factor of the total insured value (TIV). The challenge with this method is that it’s variable depending on the size of your loss and your policy language.

Here are a few things to look for in your policy:

  • The following notice may appear on your policy cover - Florida information: "THIS POLICY CONTAINS A SEPARATE DEDUCTIBLE FOR HURRICANE LOSSES, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU."
  • The percentage may be based on various parameters. It may be per location or be more defined by structure. When it’s applied by structure it can be more advantageous for policyholders since the percentage would apply only to that structures TIV.
  • It may pertain separately to property and time element losses of affected location(s) or it may combine business interruption and property. It is important to understand your specific policy’s wording to accurately calculate your out-of-pocket expenses before insurance kicks in. Further, contingent losses may again involve a separate percentage deductible.
  • Percentage deductibles are often associated with a minimum deductible and, less common a maximum deductible.

Policy Wording
Here are a few examples of policy wording related to percentage deductibles:
  • When a % deductible is stated above, whether separately or combined, the deductible is calculated as follows:
    • Property Damage – % of the value, per the Valuation clause(s) of the PROPERTY DAMAGE section, of the property insured at the location where the physical damage happened.
    • Time Element – % of the full Time Element values that would have been earned in the 12 month period following the occurrence by use of the facilities at the location where the physical damage happened, plus that proportion of the full Time Element values at all other locations where TIME ELEMENT loss ensues that was directly affected by use of such facilities and that would have been earned in the 12 month period following the occurrence.
  • As respects property located in high hazard zones for earth movement:
    • Property Damage: 5% per location Time Element: 5% per location
    • The above are subject to a minimum deductible of USD500,000 or if applicable the location deductible for Property Damage and Time Element combined, per location and a maximum deductible of USD15,000,000, combined all coverages, per occurrence.
  • When a % deductible is stated above, whether separately or combined, the deductible is calculated as follows:
    • Property Damage – % of the value, per the Valuation clause(s) of the PROPERTY DAMAGE section, of the property insured at the location where the physical damage happened.
    • Time Element – % of the full Time Element values that would have been earned in the 12 month period following the occurrence by use of the facilities at the location where the physical damage happened, plus that proportion of the full Time Element values at all other locations where TIME ELEMENT loss ensues that was directly affected by use of such facilities and that would have been earned in the 12 month period following the occurrence.

Calculating Your Deductible

Once you understand how your policy defines your percentage deductible, you’ll be able to calculate it accordingly.

Here is an example of how the combined % deductible is calculated:

  • Property, Plant & Equipment Reported Value of $250 Million
  • Annual Reported Business Interruption Value of $550 Million

Calculated Percentage Deductible as a Percentage of Total Insured Value (TIV)
    • Property, Plant & Equipment $250 Million
    • Annual BI Value $550 Million
    • Total TIV $800 Million X 3% Deductible
      • Equals $24 Million Deductible

Deductibles for CAT losses have become more complex over the years and interdependent operations spread the impact across the organization, so it’s increasingly challenging to have confidence in the preliminary evaluation, especially when informing key stakeholders. Those who have had losses know, with hindsight, there are gaps in understanding and initial questions that are critical to the deductible evaluation. Avail yourself of a candid, independent review from the start so that whether you have a recoverable claim or not, you’ll be prepared.

By: Jeff Esper | August 25, 2017

Since Hurricane Harvey made landfall, the affected area includes some of Texas’ most populous cities, consuming the state’s Gulf Coast from Corpus Christi to Houston, and inland to Austin and San Antonio. Parts of Louisiana are also expecting heavy rain. With the intense volume of rainfall, commercial policyholders in the region experiencing both physical damage and business interruption, will soon be working with adjusters to assess insured damages. 

If you have locations at risk, brace yourself for the claims process. If you expect to have a property and business interruption claim resulting from this hurricane, getting your claim together, i.e. measured, documented and submitted can be a daunting task. If you are unprepared, the process can drag out far longer than it should especially when adjusters are inundated with claims. 

The faster you get your claim together, the faster you’ll achieve a positive settlement. As a firm that specializes in claim preparation and insurance recovery, we know how to get the job done right the first time, so you can focus on your business needs. 

Here are three reasons to involve us immediately: 

1. Loss estimates and reserves 

Insurance companies set reserves based on estimates defined early in the process. They will have experts assigned to establish reserves and once they’re set, they prefer not to increase them. You never want them set too low. How can you ensure reserves are set appropriately? You’ll need the help of forensic accountants to make sure the “potential loss” is properly assessed and communicated, thus avoiding the dreaded understatement. During a CAT loss scenario like a major hurricane, the adjustment team will be overloaded with work, so it is imperative your accountants are involved from the start to police the reserve numbers.

2. Claim Competition

If you go to a restaurant (get in the door) and notice a large group about to enter, what do you do? Well, if you want to eat any time soon, you better get in the door before the large group. CAT insurance claims are the same only instead of waiting for your meal; you’ll be waiting for your money. If you want to get through the claim so you can get back to business, you need to get in the door fast. Once you have your version of the loss prepared, your loss accounting experts will know what to do e.g. submit interim claims for advanced payments. During a CAT claim, always be prepared for a settlement meeting. Insurers will be looking for the well-prepared claims to settle and get off the books. 

3. Experience. Experience. Experience.

You can’t expect your own people to be experts at something if they don’t have adequate experience. Insurance accounting requires a unique skill set developed through experience. Immediately after a disaster, hire experienced forensic accountants that you can trust and depend on for advice and a quality work product. If your team is organized and know what they’re doing, the adjuster will be more likely to spend their time on your claim over other less organized policyholders. Having an advocate that specializes in insurance claims on your team will lead to a faster and smoother claim process, especially after a CAT event. 

After decades of representing policyholders through complex CAT claims, we understand the importance of a fair and fast recovery. If you have suffered a loss caused by Hurricane Harvey or another peril, we’re here to help you recover your losses - fast! 

Contact us for a no obligation consultation!

By: Christopher Hess | April 11, 2017

What is your insurance company saying about your BI Values?

One of the services we provide to clients is the preparation of annual business interruption values and exposure analysis. In doing so, we have noticed several red flags that indicate something may be wrong with how these values are being reported to the insurance company. It’s not so much what the insurance company is telling you about your business interruption values, but what they are not telling you.

Here are three red flags insurance companies are waving by not saying anything:

Great Rates - "We are paying a lot for insurance, but we are getting a great rate!”

Beware, great rates for property policies have the potential to be misleading. The business interruption values are one of the many variables in determining rates. If you are over-reporting your values and the insurance company realizes it, your rate will appear better than others reporting more accurate values. Sure, a better rate may sound like a win, but it may just mean that the insurance company is calculating your values for you. Just as you wouldn’t trust a car salesman when he says you’re getting a great deal, you shouldn’t rely on the insurance company to do the same.

Free Services - "Our insurer analyzes our values for free.”

The insurance company may actually offer to calculate your values for you - for free. Everybody loves free things, right? Unfortunately, the insurance company will use a benchmark approach to underwriting your risks combined with COPE data and any other information you provide. The result will likely be a higher business interruption value that is not representative of your exposures. When your story is vague, the insurance company will make assumptions about your business based on what others are doing. Let all of your hard work creating incident response plans, business continuity plans and other contingency plans pay off where it can have a direct effect on your premiums.  

No Resistance - “The insurance company accepts what we give them for BI Values.” 

Watch out - if there are no questions or pushback on your values, that can mean one of two things: 1) you have done your values perfectly and they require no explanation, or; 2) you are reporting higher values than what your insurer is calculating. If you have done your values perfectly, congratulations on being one of a kind. More likely, the insurance company has calculated your values at a lower level than you have. If this is the case, wouldn’t you want to know? 

At the end of the day, no one is more qualified to value your business interruption risks than the people who run your company, but you have to know the criteria being applied and how to apply it. Underwriting is a mysterious process, so it’s better for your bottom line to take the mystery out of it by bringing clarity to your business interruption values. If you leave it up to the insurance company, chances are that the number is going to be higher than it should be.  

Don’t expect insurers to guide you to the answer that is best for you. They have a different agenda and process. They will categorize and group your risks based on some information, but if you do not provide what they need, they will default to general assumptions. You may get lucky and end up with a reasonable assessment of your risk. Or you can have a say in your luck by matching your opportunity with preparation.

For more, contact any of the professionals at RWH Myers and we will be glad to help.

Category: Insights 

Tags: BI Values 

By: Jeff Esper | December 02, 2016

Why You Need an Independent Review at the Start
Losses that appear to be under deductible always benefit from an independent review. Deductibles for CAT losses have become more complex over the years and interdependent operations spread the impact across the organization, so it’s increasingly challenging to have confidence in the preliminary evaluation, especially when informing key stakeholders. Those who have had losses know, with hindsight, there are gaps in understanding and initial questions that are critical to the deductible evaluation. Avail yourself of a candid, independent review from the start so that whether you have a recoverable claim or not, you’ll be prepared.
Many policyholders engage forensic accountants when they are confident the loss exceeds the deductible, but few think to involve help when unsure. Experienced, professional help can highlight the key factors in this evaluation, and will provide a result you can rely on to make better decisions and reduce potential wasted effort.

Here are three reasons to make this step a standard risk management protocol for your company:

1. Deductibles Require Measurement

Under or over deductible is the first question once you turn your attention to the financial response. Deductible policy language has evolved over the years as insurers respond to claim nuances and program needs. The professionals at RWH Myers have assisted clients with quantifying deductibles and preparing claims throughout these changing times. We understand the languages quirks and can quickly scope out the magnitude of applicable deductibles.

2. Insurance Accounting is Unique

Loss accounting is a different discipline than financial or managerial accounting. Misunderstandings waste time and create unwanted transactional friction. Breed process efficiency with the right questions and meaningful answers from a team with experience translating managerial accounting into insurance loss accounting for policyholders.

3. Consider Motivations

Are operations overly optimistic?  Is finance overly pessimistic?  Might reporting a claim impact contingent commissions? Independent expertise will navigate through any biases to pull it all together in a way that answers the important questions based on their merits, ultimately facilitating the financial recovery process. 

No one can anticipate a loss and policyholders actively work to avoid them, but that doesn’t mean you don’t need to plan for when you have a claim. A candid, independent review will give you the confidence of an appropriate deductible threshold evaluation and segue into a smooth and fair claim process.

by William A. Warren, CPA, CGMA

By: Jeff Esper | October 07, 2016

3 Reasons to Get Help - Now!

With Hurricane Matthew riding up the east coast, policyholders may have property damage and business interruption concerns. If it's been awhile since you've had a significant claim, we wanted to share a few  ideas to help you through the claims process.

Any experienced forensic accountant will tell you, "The faster you get your claim together the faster you’ll achieve a positive settlement." If you have a property and business interruption claim, getting your claim together, i.e. measured, documented and supported properly can be daunting, so for many policyholders the process drags out far longer than it should. And the longer it takes, the harder it is to recover what you deserve. Savvy risk management professionals know that they need help from the start, so they bring in the forensic accountants, specializing in claim preparation to augment their internal resources and expedite the process.

Here are three reasons why you should get help with your claim immediately following a loss, especially a catastrophic loss:

1. Loss estimates and reserves

Insurance companies set reserves based on estimates defined early in the process. They will have experts assigned to establish reserves and once they’re set, they prefer not to increase them. You never want them set too low. How can you ensure reserves are set appropriately? You’ll need the help of forensic accountants to make sure the “potential loss” is properly assessed and communicated, thus avoiding the dreaded understatement. During a CAT loss scenario like a major hurricane, the adjustment team will be overloaded with work, so it is imperative your accountants are involved from the start to police the reserve numbers.

2. Competition

If you go to a restaurant (get in the door) and notice a large group about to enter, what do you do? Well, if you want to eat any time soon, you better get in the door before the large group. CAT insurance claims are the same only instead of waiting for your meal; you’ll be waiting for your money. If you want to get through the claim so you can get back to business, you need to get in the door fast. Once you have your version of the loss prepared, your loss accounting experts will know what to do e.g. submit interim claims for advanced payments. During a CAT claim, always be prepared for a settlement meeting. Insurers will be looking for the well-prepared claims to settle and get off the books.

3. Experience. Experience. Experience.You can’t expect your own people to be experts at something if they don’t have adequate experience. Insurance accounting requires a unique skill set developed through experience. Immediately after a disaster, hire experienced forensic accountants that you can trust and depend on for advice and a quality work product. If your team is organized and know what they’re doing, the adjuster will be more likely to spend their time on your claim over other less organized policyholders. Having an advocate that specializes in insurance claims on your team will lead to a faster and smoother claim process, especially after a CAT event.

After decades of representing policyholders through complex CAT claims, we understand the importance of a fair and fast recovery. If you have suffered a loss caused by Hurricane Matthew or another peril, we’re here to help you recover your losses - fast!

Contact us for a no obligation consultation!

Category: Insights 


By: Jeff Esper | September 07, 2016

Once disaster strikes, the first priorities are always safety and preservation of property, but there are priorities to consider ahead of a loss to avoid unexpected surprises. Disaster mitigation and restoration is a critical service after property damage, and how you manage it may impact the outcome of your claim. Though there are many capable firms that specialize in property damage clean-up and restoration, there are some that will make mistakes and others may even take advantage of the situation. When it comes to recovering the cost of mitigation and restoration services for an insurance claim, any mishaps can create big problems that may leave you stuck with the bill. 

Here are some techniques to prevent potential problems before they arise:

  1. Vet your emergency response team prior to loss - Preparation is the key in any endeavor but with property damage claims, you cannot be too prepared. Recovery service providers should be identified and interviewed. Make sure the company you choose will be able to handle your potential issues. Involve your insurer during vetting. There are “approved” vendors that insurance companies recommend; however, just because they are “approved” does not mean there will not problems. Notify the insurance company of who you plan to use as well. 
  2. Clarify and document scope of work - Be clear on scope of work with the recovery firm and make the adjuster part of that conversation. Often, emergency response does not follow the normal protocols of a typical project. There likely won’t be time for detailed estimates, so try to get the adjuster to approve work in real-time to avoid second guessing. 
  3. Take a hands-on approach - Your property may still be underwater, but once access is granted, you must be hands-on. No one should have access to your facility without the presence of a company representative. Assign a property supervisor to the affected site to keep track of who is there and what they are doing. It’s your property and your responsibility. The bigger the loss, the more people coming in and going out, so it is vital to have a company representative onsite to observe and answer questions.
  4. Audit contractor charges before approving - The first weeks after a loss is chaotic. It’s important for policyholders to put controls in place to monitor activity and to verify work has been completed to specifications and according to the terms of the agreement. Reimbursable insurance expenses should be separated and audited prior to payment for proper detail and accuracy. This needs to be done efficiently in real-time. If you don’t have the resources, this step can be completed by your claim preparation accountants i.e. forensic accountants. Having forensic accountants on your team, along with your technical experts, can process this information in the context of insurance recovery. Don’t assume your forensic accountants will automatically audit invoices. Identifying errors or worse, fraud, is critical to avoid delays in payment or project completion. If you hire RWH Myers, we will discuss the proper protocol and work with you to establish the internal controls to intercept errors. 
  5. Address issues immediately - When the first invoice arrives, insurance companies may act surprised and even deny coverage, especially if the steps above have not been followed. Make sure to get the parties together to discuss the issues. Don’t procrastinate and don’t assume. It is important to be proactive with any potential discrepancies. The policyholder is responsible if there are unresolved differences. If the adjuster disagrees with the work performed and the invoices are paid, it may be difficult to recover everything your expenses. 

The immediate aftermath of a disaster is stressful and hectic. Preparation and communication can help you weather the storm and minimize unwanted surprises when you’re looking for claim payment. Having an experienced and independent forensic accounting team will reduce the stress, the workload and reimbursement issues. Per the tagline for one of the largest restoration firms, in the end you want it to be “Like it never even happened.”

Category: Insights 

Tags: Claims, Property Damage 

By: Jeff Esper | June 28, 2016

I am not sure why policy language has to be so confusing. Truly there are some complicated risks that insurance covers, but even the simple ones seem to be made complicated by the language used. A good example of this is extra expense. The words themselves seem pretty self explanatory; a policyholder spends extra money due to an occurrence and submits the expenses as part of the claim. Though it sounds straight forward, within a property claim these expenses require different types of measurement, documentation and coverage. To ensure you are buying the right coverage for your risks, it’s important to understand the details and the differences.

Per the International Risk Management Institute (IRMI), extra expenses are defined as: 

…additional costs in excess of normal operating expenses that an organization incurs to continue operations while its property is being repaired or replaced after having been damaged by a covered cause of loss. Extra expense coverage can be purchased in addition to or instead of business income coverage, depending on the needs of the organization.” 

This is true, however there is another kind of “extra expense” that is included as part of your business income - this is commonly known as “expense to reduce loss.” These expenses meet the definition of extra expense, however, they are incurred to reduce the duration or magnitude of the business income loss.

Consider this scenario. A manufacturer is shut down because of a covered cause of loss. Despite damaged machinery, they manage to resume operations in the facility by performing work manually with more than normal labor. The extra labor costs enables the insured to maintain some production that reduces lost sales. Is this a business income loss, extra expense loss or both? 

In this case, extra expense coverage in excess of the business income would not be necessary since the extra expenses reduced the business income loss. Any sales that were lost could still be recovered as well. If only extra expense coverage was purchased, the manufacturer could recover the extra expenses but not any lost sales.

The distinction between “extra expense” and “expense to reduce loss” is important when you are placing coverage. Quantification and documentation of extra expense exposures depends on the types of expenses and the scenarios envisioned. If the only extra expenses that are foreseen would be to reduce a greater business income loss, then it might not be necessary to purchase the additional coverage. If business income is not at risk or can be avoided entirely with extra expenses, extra expense coverage may be the way to go.  

Another category of coverage that gets confused with extra expense is expediting expense. Per the International Risk Management Institute (IRMI) expediting expenses are defined as: 

…expenses of temporary repairs and costs incurred to speed up the permanent repair or replacement of covered property or equipment.

The need for expediting expense coverage came from a time when boiler and machinery coverage applied to specific objects written on separate policies. Modern all risk policies will include expediting expense as a part of expense to reduce loss or extra expense coverage.

Again it is important to understand how you might incur these loss related expenses when placing coverage. To the extent that you can save the insurance company money by expediting, you are less likely to meet resistance. If you will need to expedite repairs for other reasons, regardless of cost or time savings, you may need to get coverage that provides full reimbursement.

Understanding the different types of expense coverage and how they apply to your business risks is critical when buying insurance. You don’t want to find out how your coverage works during a claim or realize that you’ve been paying for coverage you don’t need. Think through your potential scenarios, consult your broker and a forensic accountant to explore what coverages and limits are best for your risks. Then, share your conclusions with your underwriter to make sure everyone is speaking the same language.

By Christopher B. Hess, CPA, CFE


By: Christopher Hess | June 01, 2016

Remember the classic 80’s film “War Games” where the computer system named War Operation Plan Response, or WOPR for short, asks Mathew Broderick in that See ’n Say computer voice “Shall we play a game?” The movie was a tense thriller that was topical for my Cold War childhood but pointed out, among others things, that all games are not fun. Insurance claims should not be a game, where one side is playing games as a tactic to delay or reduce claim payment. It’s much like a battle in a war, in which one side is lured into an ambush. Unfortunately,  I see this all to often when preparing property and business interruption claims for my clients. 

The reason it is so frustrating is that my client is usually struggling to recover from a major loss to it’s business, affecting them financially and emotionally. They have done their best to protect from such an occurrence via loss control, insurance procurement and a proper claim filing. So when they document their losses and present their claim under the terms of their insurance contract, they should not have to battle bullying, stall tactics and misguided theories. 

As an example, I had a chemical company as a client whose business was heavily dependent on the supply of raw materials from specific international locations. The exclusive relationships with these international suppliers and their governments took decades to forge and represented a distinct competitive advantage. Their business was cyclical and during a low point, their manufacturing plant was devastated by a hurricane. If they were not able to get back up and running quickly, the long term contracts with their suppliers would be cancelled undoing years of supply chain efforts.  

The CEO had a legal background and recognized the real possibility that his company would not recover from this loss if the insurance they bought could not reimburse in a timely manner. He knew he was facing the possibility of laying off over 1,000 employees as well as losing long term supplier relationships.  

The insurer’s tactic was to overwhelm the client with requests for information while demanding time and attention to explain the operational complexities. While scrambling to answer the flurry of questions, my client had to accommodate a large group of insurance investigators at their chemical plant that was still underwater. Contractually, the insurance company has the right to gather information they need; however, there is a tact and decency that should be observed. The insurers strategy was to leverage the policyholder's crisis situation to establish reasons not to pay the claim based on misguided theories about their business. Because of the chaos, when the insurance consultants arrived on site to survey the damage, the client was not prepared. They did not have a proper escort for the insurer consultants to review the damaged facility. As a result, information was gathered from which they made critical assumptions about the damaged equipment that formed the basis for their theory on the valuation of replacement equipment and lost production.  

The client was not informed about these conclusions until some months later when the report was presented. They were ambushed and put on the defense, backtracking trying to disprove the incorrect information. All the while, claim payment is withheld until the issues are resolved. 

This tactic is common in claim war games. While the insurance team may just be doing their job as instructed, a company’s existence is at risk. Adjusters are often cavalier about this process and will hide behind their “duty” or policy wording, while in reality they are just playing games with the money owed to the policyholder. 

Despite the games, I am happy to report that through a lot of hard work and foresight, we were able to overcome these obstacles and secure advanced payments to stabilize the client’s operations, maintain supplier relations and create an equitable settlement. The CEO and other executives were relieved and appreciative of the results we achieved considering the situation we were facing. 

So how did we do it?  

It takes an effective strategy and careful execution to be successful and here’s the approach that we know works best: 

  1. Take Control - You do not want to put off the insurance company too long, but it is okay to let them know you are going to control when they get access and who they can interview. More claims are derailed in the first week by uncontrolled access and miscommunication. 
  2. Agreements in Real Time - one of my favorite risk managers relates this mantra during claims, “we make decisions in real-time.” What he means by this is that when confronted with a decision - say rebuild or replacement of equipment - you use all the information you have at that time to make the decision. As long as the adjuster is aware of the decision and your reasoning, they should not second guess what you have done down the road once more information is known. For example, immediately after a loss you think you need two cranes onsite to move equipment and debris. After the fact, you realize you could've got by with just one. You made a decision in real-time that was based on what you knew at the time and should not be penalized based on your initial estimation. If the adjuster doesn’t object at the time of the decision, they have no grounds to object after the fact. 
  3. Clarify Requests - the insurance company is going to ask for information - a lot of information. In general, these requests are broad in scope and may even be used to fish for something that can be used against the claim. Don’t let this happen. Ask that requests be specific - if they are not specific, send the request back. Ideally, claims are presented with supporting documentation and that should be the focus of requests. I am often used to filter this information down to what is really necessary to provide - which should be specific to what is being claimed. Extraneous information can create confusion and lead to more requests. Your loss accountant, if experienced, will be helpful with interpreting these requests and focusing on what is relevant to the claim. 
  4. Recruit Experts  - Adjusters and their team work on claims every day. It’s their full-time job. For you, it is an infrequent part of your job. If you want a smoother process and positive outcome, you need experts working on your behalf. In addition to your internal team, your brokers claim experts, as well as independent forensic accountants, engineers and outside counsel are critically important. Ensure that those on your team are working on your behalf and match-up well against the insurance company representatives. In my claim example, we were not engaged from the onset, so it is vital to have your independent team vetted and agreements in place ahead of a loss. Remember, like this example, many claims are hindered by mistakes made in the initial weeks post loss. Immediately after a loss is no time for shopping. 
  5. Don’t play games - In other words, focus on the claim, not the games. Prepare an accurate claim from your perspective, be upfront with relevant information and be reasonable in final negotiations. As stated before, games have no place in claims. Just because insurers may play games to offset your recovery, doesn’t mean you need to do the same. You are much better off being prepared, being professional and being confidently in control of the process. 

If you follow this advice, you will stand a much better chance succeeding with claim recovery. Just like WOPR realized in the movie, with claim war games there are no winners.  Avoid this ambush by being prepared and informed.

Published 6-8-16:

Category: Insights 

Tags: Claims 

By: Jeff Esper | May 31, 2016

From left: Chris Hess, Jeff Esper, Joe Wieligman, Mike Murphy

Whether the task at hand is recovering a business interruption loss or competing in a golf scramble, it takes a team effort to achieve a successful outcome. With the right combination of skills, mutual support and good fortune, your team will have a great chance of winning the day.

RWH Myers always enjoys supporting RIMS golf events. It's certainly a bonus when we put a team together that wins. In this year's Pittsburgh RIMS tournament, our team did just that. With a score of 59, we managed to capture our first RIMS chapter victory of the year. A big thanks to Joe Wieligman of Hylant and Mike Murphy, Director of Risk Management at Kennametal for excellent play and camaraderie throughout the day.

Also, a special thanks to another great team, the Pittsburgh RIMS chapter, for hosting a well organized and enjoyable day of golf, networking and fundraising.

Category: News 


By: Jeff Esper | May 02, 2016

If you are responsible for your company’s Business Interruption Values (BIV) reporting, we have a special offer for you! BIV reporting is possibly the most misunderstood data requirement of all lines of coverage. We hear it from brokers and policyholders across the country. It’s a concern for many and now you can find out how your values stack up.

RWH Myers now offers a simple and effective three-part system to assess the validity of a company's reported Business Interruption Values.

  1. First, we'll walk through a simple questionnaire that examines the process currently in place to pull together the numbers. The process used is a major indicator. Why? By looking at how you come up with your BI Values reveals what you may be missing and where potential problems are lurking.
  2. Next, we can review your current BIV reporting. With this step we can gain insight in to the output and what the underwriter is seeing. Any unclear or inconsistent numbers will create uncertainty in the mind of the underwriter and drive up premium costs. We'll ask the questions that your underwriter won't ask so that we can identify areas to improve.
  3. Finally, we'll do a BI Benchmark against others in your industry segment to see how your current BIV compares to the benchmark number. Our proprietary BI Benchmarking tool is a popular and useful tool that displays a ballpark BIV displayed in a "worksheet" like report summary. How will it compare to your numbers? There's only one way to find out.

The benefits of getting your grade are many. Once you know your grade we'll share with you what is hurting your score as compared to what you should be doing to increase the accuracy of your numbers. The way to a higher BIV Grade is the way to more accurate ratable BI values which is used to calculate your premium. This offer is free of charge to policyholders so there's nothing to lose by signing-up!

To sign-up for your BIV grade click here and we'll get started. You may contact me directly with questions.

By: Jeff Esper | February 26, 2016

Q & A with William A. Warren, CPA, CGMA

Contingent Business Interruption is a critical part of the business interruption and supply chain risks facing companies. You may have the coverage in your policy, but are you sure you have the appropriate language and an accurate measure of this exposure? It may be time to revisit this complicated risk area to prevent a costly surprise.

An earthquake, explosion or Tsunami hits on the other side of world. A key supplier is disabled bringing your production to a halt until an alternative supplier is in place and able to fill the void. Your company may suffer extra expense costs and/or a serious business interruption, i.e. contingent business interruption. Will your cover respond appropriately and make you whole? 

In this article, you’ll learn some important answers to critical CBI questions. I asked Bill Warren, CPA, CGMA and Partner of RWH Myers and an expert in valuing business interruption exposures, the following six important CBI questions:

When you do a BI values project for a client, do you always address CBI?

No. CBI exposure is a critical component in understanding and managing an organization’s risk profile, and it does adds time and effort to a first-party BI values and exposures project. CBI should be addressed as it’s own analysis to properly reflect the organization’s goal(s) and the complexities involved in meaningfully achieving those goals.

Does the BI worksheet ask for CBI?

No, the worksheet and schedule of values generally assigns an organization’s earnings contribution (BI value) to its own locations. CBI represents the interdependencies those earnings have on third-party locations. Therefore, CBI is separately addressed in the insurance program. Without specific information, the coverage (if it exists at all) is often sublimited to relatively small, tiered sub-limits for named vs. unnamed suppliers or customers. Even if specifically identified, appropriate terms and conditions are difficult to ask for, let alone get, especially if you don’t understand the risk yourself.

What is expected by the underwriter at renewal?

Renewals rely heavily on momentum … sometimes focusing only on major changes since prior years. Many programs have stable, incumbent participants who have been on the account for several years. Even when that’s not the case, there is usually substantial information from prior program marketing that is leveraged on an ongoing basis. The same goes for the policy’s CBI coverage. It has gained attention in recent years, and insurers are requiring more information to avoid limiting coverage terms in its absence.

How do we address CBI and what is the benefit of our approach?

The theory is to tie a third-party’s potential operational risk to the clients potential lost earnings. The method is always customized to the situation at hand. Even in the same industry, different organizations can employ a very different model that relies on a unique mix of suppliers/customers. Information about them is often buried in functional silos and can be difficult to identify. Even after we get the necessary information, it may be incomplete for the intended purpose. This is why our process is one of inquiry & discovery. There are some formulaic approaches to capturing data. Often the obvious, critical risks are known. However, the discovery process must include quality probing questions to identify potentially unknown risks, or simply, concerns that have not yet been communicated. We then build customized models that correlate this operational reliance to the potential financial impact. The models are designed for the organization’s financial reporting, accounting for additional internal interdependencies, inherent resiliency and explicit mitigation planning.

The benefits of this approach are many. At a high level, it provides an understanding of the potential magnitude of the exposures from these external risks so that clients can make informed decisions about the cost-benefit of mitigation planning as well as the risk transfer strategy, terms and pricing.

What are the common challenges with an inaccurate representation CBI risks?

The most common challenge is tying inbound raw materials and/or supplier spend (sometimes the only accounting data you really have about suppliers) to the potential revenue exposure if that one part/service were lost. Another typical challenge is obtaining ample information from the third party about their exposures, locations, and mitigation planning. A supplier will generally want to comply with their customer’s request for information, but the they generally do not want to burden their own customers with these requests. The latter is difficult enough in a real loss situation, let alone during an evaluation of potential exposure.The consequence of inaccurate representation could be a loss from a contingent risk that could have been proactively mitigated, consciously retained, or adequately transferred via a policy with appropriate coverage and limits. Even worse, after years of premium on CBI risk area, the insured learns the hard way, it’s either not an accurate limit or the coverage isn’t the right fit. It can be extremely frustrating, to say the least.

Why should policyholders seek help from an independent expert?

CBI is about protecting the balance sheet by protecting the continuity of earnings either via operations or insurance. To accurately express the risk that a supplier or customer disruption may pose involves a holistic look at the organization and its earnings streams. An expert will calculate the net earnings at risk to empower clients to make better cost-benefit decisions surrounding loss control, mitigation, and risk transfer. An independent expert brings an unbiased perspective. They are not constrained by the assumptions that internal personnel may make, and should not be directing the result to a predetermined outcome. They would have no agenda other than an accurate assessment prepared for the client.

Even when a company does examine CBI and supply chain risks, the project is often lead by procurement or operations functions and the results are not leveraged holistically for the benefit of enterprise risk management.

So, is it time to revisit your contingent business interruption risks? It’s a question worth asking inside your organization. Perhaps, Mr. Warren’s insights will help you come to the answer. In any case, it may be worth consulting with an independent and experienced expert to explore further. If your earnings are heavily dependent on direct suppliers and indirect suppliers, as well as direct customers and indirect customers, your CBI exposures may warrant a closer look.

Category: Insights 

Tags: Business Interruption 

By: Christopher Hess | February 01, 2016


We are excited to announce that two of our most devoted and experienced managers have been promoted to Partner!

Jerry Liberatore
Russell Zinn

Jerry Liberatore, CFE, has served as manager of the Pittsburgh office for 5 years and has worked with the Partners of RWH Myers for his entire 12-year career. Jerry always employs a proactive client-focused approach to handling business interruption, property damage, extra expense, and fidelity insurance claims both domestically and internationally. Jerry has extensive experience across a diverse range of industries, including chemical, manufacturing, retail, mining, hospitality and consumer products. His efforts have directly contributed to the recovery of over a billion dollars in insured losses for our clients. 

Russell Zinn has served as manager of the Connecticut office for 5 years and has worked with the partners of RWH Myers for 11 years. His extensive knowledge of the insurance claim process, tireless work ethic and willingness to go above and beyond have been recognized by clients, his peers and Partners. Russell’s experience includes preparation of claims in the manufacturing, health care, energy, hospitality and services industries. In addition to his work domestically, Russell has traveled extensively overseas to serve our intentional clients. 

Please join us in congratulating Jerry and Russ! p: (412) 897-3134 p: (203) 240-3889 

Category: News 


By: Christopher Hess | January 23, 2016

More often than not, a large property and business interruption insurance claim turns into an “us vs. them” scenario, creating a rough process for all involved. Not unlike a football game, someone is trying to win - at any cost. As a forensic accountant for over twenty years, specializing in quantifying business interruption losses and documenting property claims for policyholders, I’ve seen the good, the bad and the ugly. The problem is that the process is designed to focus on disagreements. 

We’ve heard the concerns from our clients and the insurers, and we can understand both perspectives. Policyholders accuse the adjuster of being  unreasonable - trying to stick it to them at every turn. Insurers accuse policyholders of trying to take advantage of the claim in an attempt to get more than they deserve. The battles can become very heated, even on a personal level. Once during a claim meeting on a large loss, the discussion between the parties intensified until an executive, from the insured, ordered the adjustment team to “get out of my building!” 

Disagreement in the course of a property insurance claim is an anticipated part of the process, but there are ways to keep it civilized and productive. It is possible to come to a fair representation of the loss without all the aggravation. The fix is really quite simple but will require the insured and insurer to take responsibility for their contribution to both the problem and the solution.

Here are some ways insurers can improve the claim process: 

Take time to understand the insured’s business 

Too often the adjuster wants to appear to know it all. It is better to listen first and try to understand the insured's position. Understanding your customer is common business sense. 

Adjusters should have superlative people skills

A big part of an adjuster’s role is to coordinate with experts needed for the situation. These are management and organizational skills. In other words, the adjuster does not need to know all the technical aspects of every loss and would be better served knowing more about how to manage people and deal with customers. Whether it’s from retiring baby boomers or cost cutting, there is a lack of well trained and experienced adjusters. 

Give the adjuster more control 

Even the best adjusters are impaired by the current claim process. Adjusters seem to have limited authority to make decisions. Policyholders find it pointless to explain their issues in great detail, when the real decision maker is somewhere in the background. When pressed to make a decision, they just throw their hands up. It’s difficult to make any progress, when the adjuster has to get every little decision approved by their superiors. To the insured, it just seems like it’s a delay tactic to put off payment, and only adds to feeding mistrust.

Here are some ways policyholders can improve the claims process: 

Give the process a chance 

While there are many times you will experience some of the problems mentioned above, the process can work with the right people involved. Communicate with the adjuster and their team. Be responsive to all requests that are reasonable and appropriate. If otherwise, ask for clarification and then address your concerns right away. 

Maintain good relations with realistic expectations

Set realistic expectations for what you want, like advance payments and resolution of differences. Though insurers are not obligated to finance a rebuild project, they should be willing to advance money to stay ahead of the cash expenditure. By maintaining good relations with the adjuster, they’ll be more open to working with you rather than against you. 

The best defense is a good offense 

Be prepared and organized on your end so that you can require the same of the insurance company. You cannot withhold information until the last minute and then demand resolution and payment. The faster you answer questions and requests, the faster they can review them. Often times it takes them longer to review the support you provide because they review the information in a vacuum. Don’t assume they understand what to ask for or what has been presented. Promote frequent meetings and discussion to make sure misunderstandings are not made part of their reports to underwriters - once it is on the record, it is harder to change. 

Escalate when needed

If issues start to arise that cannot be resolved, rather than letting it fester, escalate it to the markets involved. It is no different than speaking to a manager at a restaurant. It’s better to deal with decision makers when action is needed. This should only be used as a last resort to avoid litigation.

The insurance claim process has it's flaws. I don’t think it’s intentional, but rather a result of how it has evolved. The best approach to improving the process is by recognizing the challenges with an “us vs. them” mentality and finding a way to work cooperatively through the claim. Both sides need to help to fix it, so that more claims get resolved as they should.

Published 2-1-16:

Category: Insights 

Tags: Claims