Business Interruption


Business interruption claims have two components: lost revenue and avoided costs.  Philip Saunders Associates' (PSA's) competitive strength is in estimating revenue, where an economic and investment approach usually yields better results than standard forensic accounting.  Dr. Saunders' background in economic and financial analysis and his business and investment experience give PSA a unique advantage in understanding and modeling what would have happened, but for the interruption.

Selected Cases

  • For industrial fastener manufacturing company, PSA estimated interruption loss due to stolen computer components and data bases.  PSA analyzed company and industry, used competitors' sales and industry data to estimate sales but for the theft, and identified avoided costs.  PSA's report was basis for insurance, tort lawsuit, and tax loss claims.
  • For insurer defending $3,500,000 claim for failure of trucking company allegedly due to fire, PSA researched industry, developed history of similar companies in market, and reconstructed financial history of company.  PSA's report demonstrated plaintiff was hurt by deregulation and increased competition, failures were common in industry, company was in poor financial condition, final decline in sales was due to economic recession, and claims of value for company as an acquisition target were groundless.  Case settled for under $50,000.
  • For client sued by insurer in subrogation claim, PSA reviewed and analyzed sales, production, inventory, planning, financial, and cost accounting records of insured apparel manufacturer.  Claim had been paid based on report of national forensic accounting firm.  PSA identified crucial methodological problem with accountant's report and used three independent methods to estimate lost sales, demonstrating maximum possible profit loss of only 30% of approximately $400,000 claimed.

                                   ┬ę 2014 Philip Saunders Associates