July/August 2005

For the past 37 years, Bob Rubinstein has investigated more than $1 billion worth of property damage claims for Matson, Driscoll & Damico (MD&D). And no matter what caused the damages, the critical factor to business recovery was the early involvement of a forensic accounting team.

“The faster an insurance company can engage their accounting team, the better,” said Rubinstein, principal partner for MD&D’s office in Parsippany, N.J. “It’s very important that they engage the accountants early and allow them to work side-by-side with engineers during the rebuilding process.”

Forensic accountants should also be on-site to receive, audit, question and represent their clients and other experts hired to review an insurance claim charge.

“Often times we are part of a team of experts that are hired by an insurance company to comment on the property damage claim,” MD&D Senior Manager Nancy Gale said. “Typically, we review and offer the team our analysis of the initial claim documents. Then, to do a proper audit, we have to look at their invoices as they’re coming in.”

When investigating claims, it’s also important to have a working knowledge of a business and its operation, he said, so that accountants have a clearer picture of what’s going on during the recovery process.

“If you don’t know how things work, you’re not going to be able to do a good audit,” Rubinstein said. And being on site during the rebuilding process is critical, he added, because accountants often have to “go beyond just receiving and reviewing purchase orders and invoices to ask questions and to take extra steps, to feel out what an item is and what it’s used for and whether an insurer should pay for it as part of the recovery claim.”

Gale said there are several factors that can contribute to a successful audit and speedy settlement of a claim. Chief among them is the full cooperation of the insured – especially when providing documentation – and open communication channels throughout the claims process.

“Communication is critical,” Gale said. “To be there, on site, and to get the feel and the flow of what’s going on during the day-to-day recovery process helps not only the auditors, but also the insured in the long run.”

Bob Rubinstein is a Principal and Nancy Gale is the Senior Manager of Matson, Driscoll & Damico’s Parsippany, NJ, office.