A New England-based insurance company was the victim of a cyberattack (the “Company” or “Client”). The attacker rendered the Company’s IT systems completely unusable and demanded payment of a ransom. The Company was running in a limited capacity for over three weeks, and it took them over two months to restore its systems to original functionality. Fortunately, the Company had a business interruption insurance policy (“BI policy”), but they needed to provide an analysis to support their claim.
The Company retained DGC to provide forensic accounting and analysis in order to compile its proof of loss statement, pursuant to the Company’s business interruption insurance policy. Our team reviewed the BI policy for definitions and understanding of what the Client could include in its proof of loss statement.
We conducted interviews with the CEO, CFO, COO and other key employees who had responsibilities with the financial reporting cycle. We performed a thorough review of the Client’s normal operating expenditures incurred during the period of restoration. Our analysis included an analytical in-depth review of historical data to support the final claim. Additionally, we performed a detailed review of all expenditures during the period of restoration, which included hundreds of invoices. We provided insight on what we anticipated to be the types of questions the insurer might ask given our breadth of experience with these types of forensic assignments. The documentation that ultimately became part of the claim package reflected these considerations.
We created a detailed claim package that was robust, well-organized and easy to follow, which allowed for a smooth and timely review by the insurance company. Our final work product included a report that outlined the background of events, the methodology used to prepare the proof of loss statement aligning with the BI policy language, the results of analytical procedures, and an electronic package with the supporting documentation bookmarked to make the review process seamless. We discussed the report and supporting documentation with the insurance company’s forensic accountant, who acknowledged that the final package was comprehensive. Within one month of providing the proof of loss statement to its insurance company, the Client was able to reach an agreement and successfully settle the claim.
If you would like to discuss how DGC can advise you on these types of matters, contact a member of your client service team or Jackie Reinhard, CPA at 781-937-5721 / firstname.lastname@example.org or Elisabeth da Silva, CPA, CFF at 781-937-5792 /email@example.com. You can also visit our coronavirus web page at dgccpa.com/coronavirus which will be continuously updated with new articles and checklists to help you deal with the impact of the coronavirus on you and your business.
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