Disclaimer: None of this should be considered actual accounting advice. If you need accounting advice, please hire a CPA firm to give it. This article is just to give a general idea of what I do, and what issues might come up in a business interruption claim. Use of any of this information is at your own risk! Business interruption insurance is usually linked to the trigger of property damage. If there is no damage, there's no business interruption. Of course, there are a few other...

Disclaimer: I am not an insurance agent, and if you are buying insurance, you should use one, not my blog. My blog is to give you an idea of what you might need to know, and what could happen if you buy the wrong amount. [/Disclaimer] When buying business interruption insurance, you need to know how much to buy. An agent can help you, but you still need to know your business well enough to answer a couple questions about it. Basically, you want to cover the worst possible scenario. So...

In the world of insurance accounting, there are few things that annoy me more than a fraudulent claim. All it does is waste time and effort that could better be spent evaluating claims with merit. The biggest problem with submitting a claim that has no merit is that, in order for the insurance company to pay you, you have to prove you had a loss. In my office, there are specific things we ask for to prove that loss, such as financial statements and tax returns. If you fail to provide th...

When buying insurance, you might be tempted, or even advised, to purchase insurance with an ordinary payroll exclusion in order to lower your premiums. I urge you not to unless you have thought it through completely. Yeah, saving money is great, but only if you don't plan on paying any hourly employees during a loss. The ordinary payroll exclusion means that anything you pay to non-management employees will not be reimbursed by the insurance company. How does this affect the loss calcul...

In the field of claims accounting, there is a type of claim that is a pain in the butt - the extra expense claim. Extra expense coverage is usually provided as an add-on to a business interruption policy. Basically, any steps you take following the loss to reduce the time out of commission will be reimbursed by the insurance company. Insurance companies want to pay the least amount they can, so they will pretty much pay for you to get back up and running quickly to avoid paying for your op...

How do you look at a business interruption claim when there is no historical data to project what would have happened had they stayed open? This can either be extremely simple, or very hard. If the interruption was for a short period of time, the daily records from pre-loss can be used to project what would have happened. However, when such a small amount of data is available, some post-loss data must be utilized to project backwards. This is easier to understand when the interruption i...

I'm not sure if anyone on JU owns a real estate company that owns buildings and rents them out, but if you do, you probably have business interruption insurance to cover loss of rents. You may remember from my last article that BI insurance only kicks in when there is property damage of some kind. So people moving out is NOT a loss of rents claim. The most important things in a loss of rents claim are the lease agreement and the availability of units for tenants to relocate to. If eve...

Well, I've had a week to get used to not being the lowest man on the totem pole. I got my first files. I got a laptop. I got a key, and a security code. This is all very exciting, considering I have worked there with the slowest computer, no key(so I could get there and wait outside for the first person to arrive) and no files that were really mine. Of course, now that I have files, I still currently have nothing to do. I keep getting handed files that have no documents in yet, or th...

I've been working as a temp at a forensic accounting firm for a little over 4 months now. Today, we got some sad news. One of the accountants is leaving in about two weeks, for greener, governmental pastures. What that means is there is now an opening for a new hire. And that new hire is ME! How exciting! I don't have to be a temp anymore, I will get my own laptop, and I will get paid a whole bunch more. But the most important thing is the benefits for my family, and the stability o...

I am currently working for a forensic accounting firm. Now, when most people hear the word 'forensic' they think crime and CSI and all that. Well, forensic accounting seems to have very little to do with all of that. I have yet to come across a criminal case. Mostly, forensic accountants are hired by lawyers and insurance agencies to calculate lost wage and business interruption claims. I had never heard of business interruption(BI) insurance until I joined this firm. Basically, with B...

I got a job finally! I haven't been telling all the details of my search lately because, well, it wasn't going very well. But now it's done! I got a job with a forensic accounting firm. Basically I will be doing grunt work for them, as a Staff Accountant. Well, it's a temporary position to start, but they said that there was room for a hire if I prove to be worth it. So, for the next however long, I will be working my butt off. But it is worth it, because my hope and dream is to be a f...

So, during Finals week, also the week that JoeUser shut down due to the GalCivII launch, I completed my degree. But, between finals, all I did was interview! I had two interviews with search agencies, and two with actual companies. The actual companies were Stanley Bostitch and Putnam Investments. The Stanley Bostitch interview was basically a run down of what the job would be, and then questions about how my experience would apply to it. Since I have no experience, it did not take lon...

Ah, inventory. Lots of businesses have it, so how do we account for it? Well, under the United States Generally Accepted Accounting Principles(GAAP - If anyone works for GAP and sees a misprinted shirt, I will so buy it.) the answer is... it depends. There are four different methods of inventory valuation. They are: First in, first out (FIFO) Last in, first out (LIFO) Average Cost Specific Identification Under the International Accounting Standards, LIFO method is eliminated. W...

I am graduating from college in about... oh, 2 weeks. I do not have a job. I am an accounting major, and I really need a job to support my wife and son. So I was working at my part time gas station gig, and a lady comes in and buys something. She asks me if I want to get out of this job, and I said 'yeah, of course.' She tells me her company is looking for people and that she would give me a call. (first sign) I gave her my number and she calls and tells me they're having an open hou...