Forensic Accounting Expert Witness Advises on Declined Insurance Coverage After Hurricane

The insurance carrier denied coverage for hurricane damage for a university hospital. The university sued the insurance carrier, alleging the unrepaired building led to lost income.

ByKristin Casler

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Updated onOctober 25, 2023

Forensic Accounting Expert Witness Advises on Declined Insurance Coverage After Hurricane

An forensic accounting expert witness advises on a case involving a hurricane that devastated a university hospital, despite the best efforts of FEMA to protect and mitigate damage to the building. It had multi-peril insurance coverage, for which it paid more than $200,000. After the hurricane, the insurance carrier refused to provide coverage for the hurricane damage on the grounds it was caused by floodwaters or storm surge. The university contended that wind damaged the roofs of several buildings, allowing water intrusion and damage to machinery, equipment, furniture, fixtures, and office contents. The roof of one facility suffered catastrophic damage. The university sued for breach of contract, insurance code violations and bad faith insurance practices. It alleges that the unrepaired buildings resulted in lost students and, consequently, lost income.

Question(s) For Expert Witness

What are the university’s estimated losses?

On what is that estimate based?

Expert Witness Response

inline imageBased upon historical and projected financial data, the university has suffered a permanent decline in undergraduate enrollment beginning with the first fiscal year following the hurricane and continuing through the present. I have been asked to assume that typical undergraduate students spend between four and six years completing their undergraduate studies at a university.

inline imageThe decrease in undergraduate enrollment has had a negative impact on the university’s gross earnings stream consisting of tuition, fees, housing and other revenues, and is expected to continue through May 2015. The business interruption and consequential losses range between approximately $14.5 million and $34.4 million, representing the reduction in gross earnings, less any noncontinuing expenses (or avoided costs) over a four-year and six-year period, respectively.

inline imageThe expert CPA is director of an independent consulting firm and has more than 20 years of experience, including with an international economic and financial advisory consulting firm and a national forensic accounting and dispute consulting practice. The expert has numerous accreditations and has provided forensic accounting and consulting services to clients in a wide variety of industries.

About the author

Kristin Casler

Kristin Casler

Kristin Casler is a seasoned legal writer and journalist with an extensive background in litigation news coverage. For 17 years, she served as the editor for LexisNexis Mealey’s litigation news monitor, a role that positioned her at the forefront of reporting on pivotal legal developments. Her expertise includes covering cases related to the Supreme Court's expert admissibility ruling in Daubert v. Merrell Dow Pharmaceuticals Inc., a critical area in both civil and criminal litigation concerning the challenges of 'junk science' testimony.

Kristin's work primarily involves reporting on a diverse range of legal subjects, with particular emphasis on cases in asbestos litigation, insurance, personal injury, antitrust, mortgage lending, and testimony issues in conviction cases. Her contributions as a journalist have been instrumental in providing in-depth, informed analysis on the evolving landscape of these complex legal areas. Her ability to dissect and communicate intricate legal proceedings and rulings makes her a valuable resource in the legal journalism field.

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