A fire at a Little Rock plant. A tornado tore through a building in Moore. Hackers locked up a company’s systems with ransomware and shut down operations for a week. A burst pipe flooded a Tulsa warehouse on a Friday night, and by Monday morning, half the inventory was ruined and the doors were closed. Hurricane season put a Louisiana operation underwater for weeks.
These are all scenarios nobody wants to face, but when they do happen, you’re relieved to know your business interruption coverage will help. You filed a claim. You assumed the insurance company would step in and make you whole — that’s what you’ve been paying premiums for, right?
And then the process started.
The adjuster showed up. They looked at the damage. They asked for documents you weren’t sure you had. They came back with a number that didn’t look anything like what you actually lost. And suddenly, what should have been a recovery turned into a second crisis.
This is the point in the story where most people realize they need help — but not from who they’d expect.
Insurance companies are very good at assessing physical damage. They can tell you what it costs to replace drywall, repipe a building, or re-roof a warehouse. There are contractors, engineers, and construction estimators for that job.
But business interruption is different. It’s not about what broke. It’s about what you lost while it was broken — and what you’ll continue to lose until you’re back to normal.
That’s a financial question, not a construction question. And it’s where things get complicated fast.
How much revenue would you have earned if the loss hadn’t happened? What were your fixed costs that kept running while you were shut down? How long should the recovery period reasonably last? What about the extra expenses you incurred to keep operating — the temporary space, the overtime, the rush shipping to fill orders from a backup location?
These aren’t hypothetical questions. They’re the foundation of your claim. And the answers have to hold up to scrutiny from the insurance company’s own financial experts, from adjusters, and potentially from a courtroom.
This is where a forensic accountant comes in.
The word gets thrown around a lot, so it’s worth being clear about what it means in this context. Forensic accounting is a distinct discipline from the tax and accounting work that supports a business day to day. Forensic means the work is built to withstand challenge in court — it’s accounting that’s prepared to be questioned, tested, and defended.
In a business interruption claim, that means building a financial model of your loss that’s grounded in your actual records, supportable by the evidence, and structured in a way that aligns with how your policy defines coverage.
It sounds straightforward. In practice, it’s anything but.
If you’ve been through a business interruption (“BI”) claim, or if you’re in the middle of one right now, you’ve probably already run into at least one of these four terms:
The “but for” calculation. Your policy covers the income you would have earned but for the loss. That means someone has to project how your business would have performed if the event never happened — and then compare it to what actually happened. These projections require careful analysis of your historical financials, your contracts, your seasonal patterns, your growth trends, and the specific economics of your industry. The assumptions behind the projection matter as much as the number itself — they have to be reasonable, documented, and grounded in the evidence.
The period of restoration. This is one of the most contested elements of any BI claim. Your policy should cover lost income during the time it takes to repair or replace the damaged property. Carriers often take the position that the period should be shorter — that repairs could have been completed faster or that operations could have resumed sooner. A forensic accountant documents the actual timeline and the factors that drove it: supply chain delays, permitting backlogs, contractor availability, the sequence of repairs. The objective is to develop an accurate, supportable picture of what happened and why, rather than offering opinions about alternative scenarios.
Extra expense vs. lost income. These are two different coverage buckets under most policies, and they interact in ways that aren’t always obvious. Money you spent to keep operating from a temporary location might reduce your lost income but increase your extra expense total. Properly categorizing every dollar — based on how it was actually spent, not how either side prefers to characterize it — is detailed, technical work that directly affects the outcome of the claim.
Continuing expenses. Your rent didn’t stop because your building was damaged. Neither did your loan payments, your insurance premiums, or the salaries of the employees you needed to keep on payroll. These continuing fixed costs are often recoverable depending on the specific policy language, but analysis is needed to determine which costs are truly fixed, which are variable, and which could have been reduced during the interruption. Documenting what continued, why, and how each cost connects to the recovery is the kind of detailed work that determines whether a claim is fully supported.
Business owners across Oklahoma, Arkansas, and Louisiana face a concentration of natural disaster risk that makes business interruption coverage especially important — and BI claims especially common.
Oklahoma sits in the heart of tornado alley. Severe storms, hail, and straight-line winds regularly cause commercial property losses from Oklahoma City and Tulsa to Lawton, Norman, and Stillwater. When a tornado impacts a manufacturing facility or a hailstorm damages a retail center, the physical repairs are only part of the equation. The lost revenue during the months it takes to rebuild is often the larger financial hit — and it’s the part that’s hardest to measure and most frequently disputed.
Arkansas faces many of the same storm exposures, with the added complexity of flooding along the Arkansas River corridor and ice storms that can shut down operations for weeks in the northwest part of the state. Businesses in Little Rock, Fort Smith, Fayetteville, and Jonesboro all have meaningful BI exposure, and the claims process in Arkansas has its own regulatory nuances that affect how losses are documented and submitted.
Louisiana brings hurricane and flood risk on a scale that’s difficult to overstate. Businesses in New Orleans, Baton Rouge, Shreveport, and Lake Charles have been through this cycle repeatedly — a major storm hits, operations shut down for weeks or months, and the BI claim becomes the lifeline that determines whether the business survives or closes permanently. The financial measurement challenges on hurricane-related BI claims are particularly complex because the disruption often extends well beyond the physical repair timeline, with supply chain interruptions, workforce displacement, and customer loss compounding the direct damage.
Cyber risk does not respect state lines. Ransomware attacks, business email compromise, and system outages have become one of the most common sources of business interruption claims for companies across the region, and the financial measurement issues are at least as complex as those from a physical loss. A cyber policy may respond differently than a traditional property policy — coverage triggers, waiting periods, and the definition of a covered event vary significantly between carriers and forms. The forensic accounting work, however, follows the same fundamentals: establish the pre-loss baseline, model what would have happened absent the event, document the actual results during the interruption, and measure the gap. Whether the cause was a tornado in Moore or a ransomware attack on a Tulsa logistics company, the question the claim has to answer is the same.
Across all of these scenarios, the pattern is the same: the carrier’s adjuster arrives, assesses the damage, and produces a number. That number does not always reflect the full financial impact of the interruption. And without an independent, well-documented analysis of the actual loss, the policyholder is left negotiating from a position of incomplete information.
Here’s something most policyholders don’t realize until they’re deep into the process: the insurance company isn’t just reviewing your claim with their adjuster. On any significant BI loss, they’re hiring their own forensic accountant to analyze your financials and develop their own measurement of the loss.
That accountant is applying their professional judgment to your records and reaching their own conclusions. You may agree with those conclusions, or you may not — but either way, the carrier’s analysis will be the basis for their settlement position.
The question is whether there’s an independent analysis on the other side of the table that’s equally rigorous.
A forensic accountant’s value in this process isn’t about producing a bigger number. It’s about producing an accurate number — one that’s thorough, well-documented, and defensible. If the analysis is sound, the number speaks for itself. If it’s not, no amount of advocacy will save it.
This is an important distinction. A forensic accountant isn’t a hired gun. They function as an independent expert, with credibility grounded in careful documentation, transparency, and adherence to event-specific evidence and sound methodology. The moment an expert’s work looks results-oriented rather than evidence-driven, it loses its value — in negotiations, in mediation, and especially in front of a judge or jury.
Every claim is different, but the work generally follows a pattern.
It starts with your records. A forensic accountant will dig into your financial statements, tax returns, bank records, point-of-sale data, contracts, purchase orders, and anything else that tells the story of how your business was performing before the loss. The goal is to build a clear, documented baseline — what “normal” looked like for your business.
From there, they project what would have happened if the loss hadn’t occurred. This isn’t guesswork. It’s a financial model built on your actual performance, adjusted for known factors like seasonality, growth trends, new contracts, market conditions, and industry benchmarks. Every assumption is documented. Every input is traceable to a source.
Then they measure the gap. The difference between what you would have earned and what you actually earned during the interruption is your lost income. Add in the extra expenses you incurred to mitigate the loss, the continuing fixed costs that didn’t stop, subtract saved expenses that were not incurred, and account for any other potentially recoverable items under the policy, and you have a complete picture of the claim.
All of it gets documented, organized, and presented in a format that can be submitted to the carrier, used in negotiations, or introduced as evidence if the dispute goes to litigation. The work product has to be clear enough for a non-accountant to follow and rigorous enough that another forensic accountant can examine every assumption and arrive at the same conclusion.
The honest answer to this question is: earlier than most people do.
Business owners often wait until the claim has stalled or been denied before they think about getting accounting help. By that point, records may be harder to gather, memories have faded, and the financial picture is harder to reconstruct accurately.
The earlier a forensic accountant is involved, the more complete and reliable the analysis will be. Real-time documentation is always stronger than reconstruction after the fact. Data captured close to the event is typically more accurate. And having a clear financial picture from the beginning helps everyone involved — the business owner, the attorney, the public adjuster, and even the carrier — work from a common set of facts.
For a business owner in Oklahoma, Arkansas, or Louisiana dealing with a loss, engagement is most useful as soon as the claim is likely to involve significant dollar amounts and meaningful complexity. A recommendation from your attorney or public adjuster is often a strong signal that the claim has reached that point.
For attorneys and brokers, having a forensic accountant available to bring in early means the financial foundation of the claim is solid from the start. The loss measurement is the backbone of every BI claim. Coverage analysis, negotiation efforts, and litigation preparation often rely on getting the numbers right.
Business interruption claims are financial disputes dressed up as insurance claims. The policy language matters. The legal strategy matters. But at the end of the day, the question everyone is trying to answer is a simple one: how much did this business actually lose?
Getting that answer right — and being able to defend it — is what a forensic accountant brings to the table. Not opinions. Not estimates pulled from thin air. A documented, supportable, defensible accounting of what happened and what it cost.
Whether your business is in Oklahoma City, Tulsa, Little Rock, Baton Rouge, or anywhere across the region — if you’re going through this process right now, you don’t have to figure out the numbers alone. And you shouldn’t.
If you have any questions about this content, or if you would like more information about HoganTaylor’s Forensic, Valuation & Litigation Support practice, please contact Clay Glasgow, CPA, ABV, CFF, CFE , Advisory Partner.
INFORMATIONAL PURPOSE ONLY. This content is for informational purposes only. This content does not constitute professional advice and should not be relied upon by you or any third party, including to operate or promote your business, secure financing or capital in any form, obtain any regulatory or governmental approvals, or otherwise be used in connection with procuring services or other benefits from any entity. Before making any decision or taking any action, you should consult with professional advisors.