When a regional service provider experienced property damage that brought operations to a halt, leadership faced immediate uncertainty around the financial impact of the shutdown.
They needed a clear, supportable calculation of lost profits to present to insurers and to guide their recovery planning. Without defensible numbers, the claim process could stall, and management wouldn’t have the visibility required to make informed operational decisions.
Building a Defensible
Financial Picture
To provide clarity, we conducted a comprehensive review of the company’s financial history and the specific period affected by the interruption. This involved establishing a benchmark based on pre-loss revenue patterns and seasonal trends, adjusting for one-time or nonrecurring items, and separating variable and fixed costs to calculate the true contribution margin lost. We also incorporated mitigation actions and documented recovery timelines using ongoing correspondence with the client, ensuring the financial model reflected actual conditions during the interruption.
Through this structured approach, we developed a transparent narrative of what the company would have earned “but for” the property damage. The final report summarized key assumptions, outlined the methodology used, and provided clear calculations supported by the client’s own data. This level of detail made it easier for insurers to follow and validate the results.
A Result Aligned With
Insurer Expectations
The analysis quantified a material loss of gross revenues and produced a substantiated measure of lost profits that aligned with insurer expectations. With a well-documented, defensible report in hand, the client was able to expedite its insurance recovery and resume operations with the financial clarity needed to move forward confidently.
