What it costs to hire an expert for a business interruption claim

The work behind the fee

A fee on a business interruption claim pays for far more than a site visit. The expert reviews the policy wording, the indemnity period, any trends clause and the extensions for suppliers, customers or denial of access. They rebuild the business's expected performance from historic accounts and forecasts, quantify the actual shortfall, and identify continuing and saved expenses.

Then comes the long phase: preparing monthly or quarterly loss statements, documenting increased costs of working, responding to the insurer's accountants, negotiating interim payments and finally agreeing the settlement. On a long interruption, this can mean a year or more of regular work, which explains why BI fees are often higher in absolute terms than those for straightforward property damage.

• Coverage analysis of the BI section and extensions
• Baseline modelling and trend adjustments
• Monthly loss statements and reconciliations
• Negotiation with the insurer's forensic accountants
• Interim payment requests and final settlement

Indicative fee bands by claim size

There is no official scale for policyholder experts in the English-speaking markets. The table below is an indicative order of magnitude observed on the market, not an official or legal tariff. It assumes a percentage fee on the amount recovered and a sliding scale that falls as the claim grows. Amounts are shown in pounds sterling and US dollars as broad equivalents; Canadian, Australian and Irish firms tend to follow similar logic in their own currency.

In the United States, public adjuster fees are regulated at state level and several states impose statutory caps, Florida among them, with lower limits for claims linked to declared emergencies. Always check the rules of the state where the property is located.

Indicative amounts, to be checked with each expert.

Percentage, fixed fee or time charges

Percentage contracts remain the norm. The crucial detail is the base: a percentage of the whole settlement, of the BI element only, or of the uplift achieved above the insurer's first offer. A 10% fee on the total can cost far more than 20% on the uplift if the insurer was already close to a fair number, so ask for illustrations using your own figures.

Some firms, particularly forensic accountants acting as claims preparers, work on hourly rates or a monthly retainer, which suits companies that prefer predictability or that already have strong internal finance teams. Hybrid structures, with a modest retainer and a reduced success percentage, are increasingly common.

Minimums, taxes and extras

Expect a minimum fee on smaller claims, reflecting the fixed effort of setting up the model. VAT applies to fees in the UK and Ireland and GST in Australia and Canada, and some states apply sales tax; confirm whether quotes are net or gross. Costs of external specialists, such as industry economists or valuation experts, may be charged on top, as may travel for multi-site claims.

Does the policy pay for the expert?

Many commercial policies include a claims preparation costs extension, sometimes called professional fees or accountants' clause. It reimburses reasonable costs of producing figures the insurer requests, usually up to a stated limit. It rarely covers the advocacy element of a public adjuster or loss assessor, and insurers may argue that fees for negotiation are outside its scope.

Read the limit and the conditions: some extensions apply only to accountants' fees, some require prior agreement and some sit within the overall BI sum insured. The practical consequence is that part of the expert's fee often remains with the business, and that should be weighed against the expected gain.

How cost behaves on small, medium and large interruptions

A short closure with clear lost sales may produce a claim of £20,000 to £40,000. Here, a percentage of 12% to 15% equates to a few thousand pounds, and a fixed fee or hourly arrangement may be cheaper. For many such claims, the company's own accountant can handle the figures without separate advocacy.

For a mid-sized interruption, say a £400,000 claim after a warehouse fire, a sliding-scale fee of around 8% to 10% would sit in the order of £32,000 to £40,000. On a seven-figure claim involving several sites and a long indemnity period, the percentage typically drops to the low single digits, but the monetary amount still justifies a detailed comparison of proposals.

A worked illustration

Suppose the insurer's accountant proposes £600,000 and, after the policyholder's expert revises the trend adjustment and the treatment of payroll, the agreed figure is £820,000. A 7% fee on the total would be £57,400; a 20% fee on the £220,000 uplift would be £44,000. Neither is automatically better: the choice depends on how confident you are about the insurer's starting point. These figures are illustrations only.

Comparing firms and reading the engagement letter

Request at least two proposals and compare them on the same claim scenario. Ask who will actually do the modelling, how often you will receive updates, and whether the firm has handled interruptions in your sector. Be wary of anyone who promises a specific settlement figure before reviewing the accounts.

The engagement letter should state the fee base, rate, minimum, taxes, extra costs, termination terms and what happens to fees on interim payments already received before appointment. Check whether fees apply to amounts the insurer had already offered in writing, and whether there is a cooling-off period.

• Fee base clearly defined, with an example
• Treatment of payments made before appointment
• Cap or sliding scale for very large outcomes
• Exit terms and fees due on termination
• Licensing or authorisation details

The right fee structure for a BI claim depends on the size of the gap you expect to close and how long the interruption will last. Compare offers carefully, and use expertdassure.com to understand the expert's role before you sign.