COVID-19 and BI loss calculations
Baker Tilly’s Simon Oddy breaks down what insurers should know about business interruption claims filed in the wake of Hurricane Ida & the pandemic.
Even before the pandemic, determining business losses required careful investigation by a team of specialists to establish the fiscal well-being of a company and the factors that contribute to its overall financial health. Last year, many companies were forced to close, at least temporarily, adjust their business operations and adapt to unknown and uncertain conditions.
The latest Insurance Speak podcast examines how COVID-19 has affected business interruption loss calculations and the factors forensic accountants, claims adjusters and others will be considering as part of a BI determination. Simon Oddy is a partner with Baker Tilly, an international tax and advisory firm, and has extensive experience handling large, complex losses, fraud, liability and cyber claims across six continents.
Oddy shares that COVID-19 led to disruption and showcased just how important business interruption coverage is for a company. “The pandemic has changed the measurement of business insurance claims,” he says. This has created some complications for the methodology used and forced insurers to tackle claims a little differently than in the past.
Normally, part of an assessment for calculating business interruption losses would involve a comparison to previous years’ income. The onset of the pandemic changed how many businesses operated, created new stresses and risks, and forced many to close or at least adjust how they operated. All of these factors affected operations. Oddy advises insurers to separate pandemic-related losses from other business fluctuations such as supply chain interruptions when considering different factors that will affect loss determinations.
For more on the types of specialists to bring in for a business interruption claim investigation and how events like Hurricane Ida will also impact these types of claims, listen to the podcast above or subscribe to Insurance Speak on Spotify, Apple Music, Google Play or Libsyn.
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