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Extra Expenses
When a business experiences an unforeseen event such as a fire, flood, building collapse or explosion, it may need to reconfigure some or all of its operations to avoid losing sales or to ensure it’s able to meet customer obligations. It may even lease or buy temporary equipment or buildings to continue operations during the repair or replacement of the damaged property. Mitigation activities like these can result in extra expenses or increased costs that go above and beyond what the company would ordinarily have spent.
SERVICES
MDD has decades of experience quantifying costs like these across nearly every industry, some of which include retail, wholesale, rental, hospitality, manufacturing and energy.
Our team of experts will conduct an objective, in-depth investigation that will look at factors such as changes in the business cycle, local economies and market conditions. Our specialists will also examine the business’ normal operations, the effectiveness of its mitigation strategy and the impact of the interruption on projected revenues and profits. This information will help verify whether or not, or to what extent, the claimed extra expenses/increased costs are reasonable and necessary, or economic.
MDD offers a wide range of quantification services that include:
- Establishment of accounting and document management protocol
- Monitoring and analyses of all actual expenses incurred during the recovery period
- Comparison of normal operating expenses/costs incurred to the projected, actual and/or standard costs
- Identification of loss-related factors that contributed to the extra expenses/increased costs
- Identification of potential residual value
- Verification that the extra expense served to mitigate the loss of business income
- Expert and consulting witness testimony
Experience
Experience
Contact one of our experts below or filter experience based on region.
ARTICLES
RELEVANT ARTICLES
Our experts are extremely knowledgeable about thier subject areas and often write educational material and commentary on topical issues they come across.
The Impact of Tariffs on Insurance Claims
We have heard the current incumbent of the White House refer to tariffs as "a great negotiating tool", "a beautiful thing" and “taxes on foreign countries”. While the justification of high tariffs used to be to punish unfair trade from...
Floods in the South of Germany in June 2024: Highly Complex Business Interruption Losses
At the beginning of June 2024, unusually high precipitation occurred in large parts of southern Germany. This resulted in flooding and in property damage to residential and commercial properties over a large area. Initial estimates provided by the German insurance...
Renewable Energy Losses – Winds of Change
It is May 20, 1899. New York City taxicab driver Jacob German is the recipient of the United States’ first-ever speeding ticket. He whizzed by at 12 miles per hour on Lexington Avenue and was then pursued and remanded by...
Waste to Energy
What is Waste to Energy? Waste to energy refers to the process of converting municipal solid waste (MSW), otherwise known as trash, into usable heat, electricity, or fuel. The three main MSW categories include: Biomass or biogenic (plant or animal...
The Varying Effects of a La Niña Cycle on Business Interruption Claims
Earlier this month, Australia’s Bureau of Meteorology announced that the current La Niña conditions would likely continue over the coming months.[i] According to the National Oceanic and Atmospheric Administration, the La Niña effect occurs when there are “periods of below-average...
Business Interruption Measurement Considerations in a COVID-19 World
Although hurricane season doesn’t normally conclude until November 30th, we have already exhausted the modern English alphabet in terms of named hurricanes. In the last year, we’ve also seen an ever increasing number of wildfires, explosions and tropical storms. While...
Forensic Accounting Liability Exposures
The below article first appeared in THE STANDARD, New England’s Insurance Magazine. It features excerpts from a presentation given by MDD partners Paul McGowan, CPA, CVA and Jon Ducey, CPA, CVA on the topic of liability claims and other key...
Caribbean ‘vacation’ for CAT claims
As a global forensic accounting firm, we at MDD have a “boots on the ground” mentality when it comes to quantifying economic damages for catastrophe (“CAT”) claims. The busy hurricane season in 2017 meant that I, along with many of...
Cyclone Debbie May Create Complex Claims Issues for Insurers
Cyclone Debbie and the subsequent rain and flooding events across Queensland, Northern NSW and New Zealand have caused significant damage to property and infrastructure, limited rail access, closed ports and caused damage to numerous roads and bridges. Rail closures in...
Contaminated Products Insurance Claims: How to Check the Costs of a Product Recall
The number of food product recalls reported in the UK through the FSA (Food Standards Agency) rose 78% in 2015. With many UK businesses operating internationally, a product recall situation can impact many countries and cost millions of pounds in...
Staying Afloat in the Flood – The Cost of Flooding to Companies with Exposures in India
Given the number of major flood occurrences in India in the past decade, European and US companies with exposures in the country should examine their insurance coverage and disaster management planning. As the waters start to subside following India’s latest...
The Effect of Deductibles & Policy Wording – Is It What You Think?
With a typical Energy claim standing at approximately USD 4.5 million, it’s no surprise that Business Interruption (BI) is once again the #1 business risk for the fourth year in a row[i]. To help insurers mitigate their exposure when an...
Stemming the Spiralling Cost of Delay: Delay in Start Up (DSU) or Advance Loss of Profit (ALOP) Insurance Cover
Delay in Start Up (DSU) or Advance Loss of Profit (ALOP) insurance cover is an absolute necessity for large and/or complex construction or engineering projects, particularly those financed with structured debt. This insurance was designed to provide cover for the...
Catastrophe Events and Business Interruption Insurance
In the event of a devastating catastrophe (“cat”) be it an earthquake, hurricane, flood, or tornado, the first and foremost priority is to ensure the safety all the people involved. Once this has been established, business owners can then begin...
Pre-Judgment Interest, Part III: Property Damage, Profit, and PJI
My practice involves a lot of work for property insurance companies. When damage to property occurs, the property owner may advance a claim against the third party tortfeasor for both the value of the damaged property as well as an...
Pre-Judgment Interest, Part II – Interest and Taxes
In the previous post, I discussed the large pre-judgment interest award in Cefaclor. In that case, one of the issues raised by defendant’s counsel was that to award the plaintiff compound interest would result in overpayment; since the damages award is...
Top 10 Most Common Errors in Damages Calculations – #1: Failure to Consider Saved Expenses
Towards the end of the Great War (or World War I as it came to be called), the American president, Woodrow Wilson, proclaimed Fourteen Points outlining his goals for the reconstitution of Europe, and the international state system as a...
Cyber Loss – The Cyber Threat Facing Businesses
Businesses face the risk of financial loss and disruption due to theft of private or sensitive information, attacks on IT systems, and fraud. MDD's Norman Kwan shares that cyber risks policies are still evolving and there are issues that need considerations...
The Global Economy’s Impact on Business Interruption & Extra Expense Claims
While the signs have been around for some time now, the economic crisis that seemed to officially begin with the failure of the U.S. mortgage institutions Fannie Mae and Freddie Mac has now morphed into an unpleasant reality that is...
Handling Large Complex Claims
Large insurance claims are almost always complex, time-consuming and in need of a forensic accountant. They are complex because of the secondary impact from the misfortune setting off the initial claim. Take, for example, a fire at a ski hill...
