Case Studies
J.S. Held Acquires Technorm, Québec’s Leading Forensic, Building Safety & Compliance Experts
Read MoreAn initial outage occurred in May 2020 due to a fire in the boiler room of one of two production lines at the clinker plant. Following a temporary repair, another incident occurred in July 2020. Production of clinker was therefore affected in two windows.
Our team observed that the first outage took place during the waiting period. We also questioned whether the second outage was a separate intervening event or a continuation of the first (given the temporary repair). The production losses were from clinker as opposed to cement. The cement plant continued operations unaffected due to the strategic stocks of nine months of clinker.
The insured made a claim under the accumulated stocks clause for the opportunity loss of producing more clinker during the periods of downtime. The timing of the losses followed the outbreak of COVID-19, and we observed that turnover had not been temporarily maintained from accumulated stocks, as production (even with the loss) was higher than the sales during the affected period. The stock depletion occurred due to the planned overhaul towards the maximum indemnity period. Regarding the accumulated stock valuation, there was debate over what would constitute an equitable allowance. We also discussed whether the increase in the cost-to-production ratio would represent true indemnity. (Re)insurers sought legal advice on the points raised. J.S. Held was asked to calculate the potential value of loss based on several scenarios ranging from USD 0 to 1.7M, depending on the assumptions used. We understand that claim was concluded at USD 0.4M.
Daniel Thorpe
Executive Vice President
Forensic Accounting - Insurance Services
+971 56 658 3620
[email protected]
> Business Interruption / Lost Profits
We provide specialized expertise in the quantification of damages related to claims and disputes involving business interruption and lost profits. Our team combines their financial expertise and diverse backgrounds to effectively evaluate the insured's/claimant's operations and industry/market-specific factors, to quantify interruptions and lost profits.
> Forensic Accounting
Our Forensic Accounting Practice includes Certified Public Accountants, Certified Fraud Examiners, Certified Financial Forensics experts, and other financial experts who specialize in financial investigations, dispute resolution, and regulatory compliance. We deliver the truth behind the numbers in financial matters involving insurance claims and disputes, business interruption/lost profits, cyber damages, Delay in Start-Up (DSU) / soft costs, extra expense, family disputes, fraud, labor & employment disputes, personal injury damages, and bankruptcy/insolvency.