Stern, Hill & Gregory LLP

Inventory Loss Claims

We are constantly engaged to confirm and measure Inventory loss claims. We accomplish this by applying forensic accounting techniques to confirm existence (for Inventory no longer available for physical inspection because of theft, fire or unauthorized pre-inspection disposal), and to confirm the covered values of the items claimed.

Forensic accounting techniques applied to Inventory Loss claims may include the use of accounting records to develop an Inventory Dollar Value Roll in an attempt to confirm loss amounts. Another technique is using accounting records to develop a Specific Item Roll by tracking units of Inventory in and out of the Insured’s business over time. These and other techniques for confirming a loss are dependent, of course, on the type, completeness and quality of the records maintained by the business being examined.

Over the years we have seen many fabricated invoices and accounting documents presented to exaggerate an Inventory loss. So our review includes an inspection of supporting documents with a critical eye. We also look for accounting aberrations -- usually prepared after a loss event occurred and aimed at suggesting a higher than warranted loss amount.

We are familiar with coverage terminology and valuation issues that come up in Business Personal Property claims, including:

	Replacement Costs		Actual Cash Value
	Values at Risk		Sold but not delivered
	Coinsurance		Agreed Value
	Reporting Forms		Selling Price Endorsements