Extra Expenses

Matson, Driscoll & Damico’s forensic accounting teams have worked a number of high-profile global extra expense claims in the retail, wholesale, rental, hospitality, manufacturing, energy and distribution industries.

In many of these cases, unforeseen events such as fires, floods, building collapses, mechanical breakdowns and explosions generate extra operating expenses until the business’s damaged property is repaired and normal operations resume. 

Our professionals help to identify mitigation strategies to reduce a client’s exposure to lost sales, contracts and even customers, and deliver a range of services for businesses, including: 

• Establish accounting and document management protocol
• Monitor and audit all actual expenses incurred during the recovery period
• Compare the actual expenses to the planned, budgeted or standard costs
• Isolate any non-loss related factors contributing to the additional expenses
• Reconcile and explain any accounting differences
• Apply tests to determine if claimed extra expenses served to reduce the loss
• Identify extra expenses claimed under Business Interruption that are part of a property damage claim and advise accordingly
• Provide regular status reports and meet with other professional and instructing principals to explain our findings
• Provide objective expert reports and testimony, if necessary

Our team also works to gain a solid understanding of the business’s normal operations, the effectiveness of their mitigation strategies and the impact of the interruption on projected revenues, expenses and profits.

MD&D’s forensic accountants consider changes in the business cycle, local and global economics, market conditions and a forecast of the business’s experience had no loss occurred. Each helps determine whether extra expenses are reasonable, necessary and directly related to the claimed event.