After your business suffers a loss, you’ll meet the insurance adjuster and his accountant.  During this first meeting, or soon after, here’s what you’re likely to be told:

• The adjuster and the accountant will work together to make sure that you’re paid what you’re owed.
• The accountant is not an insurance company employee, but an independent CPA with decades of experience in this field.

Here’s the rest of the story:

• The insurance company’s accountant frequently earns almost all of his or her fees by representing insurance companies and their attorneys.
• When the insurance company’s accountant makes draft schedules related to your business interruption loss, those schedules will be used internally by only the accountant and the adjuster—you will not be invited to review them.

The fact of the matter is that the insurance company’s accountant is there to calculate the loss based on instructions from the adjuster.  The accountant is there to assist the adjuster and make sure that the adjuster does not overpay the claim, which is reasonable. But here’s the problem with this arrangement: The “independent” accountant is not tasked with making sure that you, the insured party, receive a fair settlement.

The insurance adjuster you’re dealing with may be very personable. You may even like him or her. Heck, I even like some of them. But make no mistake about it:  When the adjuster and the adjuster’s accountant make assumptions or estimations in their calculations, those assumptions will favor their client—and their client is the insurance company.  That’s why you need your own expert.