Business interruption claims begin with the occurrence of un anticipated event such as floods, hurricanes, fire, or any other form of interference causing intervention with business activities and impairing the business. As a result, the enterprise incurs financial loss, and normally such claims are highly complicated and require deep analysis concerning lost revenues and profits as well as other costs due to the disruption in that respect. It is now that business litigators and insurance companies rely on forensic accountants for giving a realistic and plausible damage assessment.
Engel & Engel is the top accountancy and forensic practice whose experience in dealing with business interruption claims is evident as both a plaintiff and a defendant. A new damage and mitigation analysis by its experts can be continuously reinforced with established principles of finance, which are well defended in courts. Such vast experience and detailed knowledge over different industries make Engel & Engel deliver quality findings and expert opinion in business interruption cases.
Forensic Accountants in Business Interruption Claims in California
Forensic accountants in Los Angeles play a critically important role in business interruption claims. These professionals bring the financial data to analysis in order to determine the nature and extent of a business loss and understand whether losses claimed by the applicants overlap with coverage under insurance.
This process requires a review of historical financial records of the company under review, its market conditions, and circumstances of the interruption.This specialty area by Engel & Engel would involve evaluation of:
- Lost Sales During Business Interruption: It identifies the revenue a business lost during the period of interruption. A forensic accountant needs to be able to distinguish the natural fluctuation of sales and that caused by this interruption.
- Lost Profits Lost during Business Interruption: There are profits also, which a business has to see take a hit. Generally, a drop in profits is induced by the unearned sales. For the calculation of actual economic loss due to interruption, profit loss reports are prepared by Engel & Engel, considering fixed and variable expenses.
- Loss of Goodwill during Business Interruption: Goodwill can also be lost as an interruption can cause a loss in reputation and market position, besides the financial loss. Engel & Engel is conscious of losing goodwill and long-term effects it has on the profitability of a business venture.
- Expenses Incurred in Connection with Business Interruption: It includes most of the costs that businesses would have to incur for recovery from losses. Such expenses may include relocation costs, additional temporary staff, and new marketing efforts due to the stoppage. Engel & Engel will determine and calculate the direct expenses so that the same are considered of the specific claim.
- Mitigation Analysis in Relationship with Business Interruption: In addition, the forensic accountants will also determine whether, had the business undertaken reasonable measures to mitigate the loss under consideration, it would have still been exposed to loss. In this light, the Engel & Engel team ensures that claims reflect losses and the efforts made at reducing those losses.
Expert Testimony in Los Angeles Court
Forensic accountants not only prepare the financial analysis but also serve as an expert witness for litigation purposes. In a business interruption case, an expert’s testimony, whether credibility or supported and stand up against cross-examination, is of utmost importance. According to Engel & Engel, it has an outstanding track record as an expert witness in court to produce clear and defensible testimony on significant cases of financial loss.
Engel & Engel testifying experts translate difficult numbers into useful insights for the court by using established financial principles and methodologies thus translating to reliable, sound testimony.
How Engel & Engel Helps Litigation Lawyers
Engel & Engel collaborates with litigation attorneys to ensure that business interruption claims are documented properly and presented accurately. Their company will help clients in dealing with the various concerns of business interruption claims as follows:
Engel & Engel’s forensic accountants consider external factors beyond the transaction and trends in the market that could have contributed to the loss.
Through the comprehensive financial analyses and serving as expert witnesses, Engel & Engel helps the attorneys to solidify into better cases that show the economic reality of business interruptions.