meet market demands, the risk evaluation
may have more uncertainty. These areas,
including cyber, product recall and other
crisis management lines, are taking pro-active steps to provide policyholders
with access to professionals who can assist with different levels of risk evaluation
and loss measurement.
In turn, we are seeing the role of the
forensic accountant expanding to assist
at different points in the insurance life-cycle, before, during and after an insured
handles a crisis event. This expanded role
now includes measuring potential exposure in a pre-loss consultation to post-loss review — working with the adjuster,
insurer, broker and insured.
Forensic accountants are being asked
to look back at what they have experienced in the past, and apply that to future potential problems to better prepare
organizations. The forensic accountant’s
role is to provide an independent, unbiased evaluation of the financial impact of
a loss or potential loss.
In these specialty lines, forensic
accounting and consulting services can
be brought in before a loss occurs to help
evaluate the potential risks for an insured,
as well as educate on how to handle the
claim process, and what to expect. Discussions with insureds in the pre-loss period, and establishing a better risk profile
can greatly aid insurers in identifying potential loss areas. It can also allow the insured to better prepare for supporting any
damages claims that may be presented.
Additionally, this discussion can help
guide applicable coverage levels.
After a loss, the forensic accountant
will continue to provide the more traditional services to the quantification of the
loss, as they have always done.
From a risk management perspective,
there are enormous benefits to starting
the conversation about potential damages
and submitting a damage claim early. In
crisis management losses, cash flow and
financial stress can make the ability to
recover challenging, so anything that
can be done to ensure the claims process runs smoothly and efficiently, the
quicker the ability for the insured to
As the pressure to create a more
efficient claims process continues to
have an impact on the reputation of
insurers, focusing on steps to take
during the relative serenity of the pre-loss period will become more and more
important. Granted, not all steps in the
process can be accelerated, but it would
make sense to identify those that can be.
Getting your financial ducks in a row and
adequately evaluating potential risk, and
then being ready to present a supportable
claim can be key to successful claims
Simon Oddy (Simon.oddy@bakertilly.
com) is a partner in the New York office
of Baker Tilly Virchow Krause, LLP.