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COVID-19: Assessment of time element claims

COVID-19: Assessment of time element claims

Our perspective on the benefits of early assessment of COVID-19 related delays and associated costs in time element claims.

Briefing note: 15 June 2020

By Adam Humphrey

Well publicised actions, including the FCAi sponsored UK test cases, are progressing and will ultimately inform policy liability determinations associated with COVID-19 (C19).

During this hiatus, we explore the steps insurers can take to facilitate early resolution of time element claims once coverage issues are clarified. This Briefing Note argues that the timely involvement of experienced loss adjusters and forensic accountants can demonstrate rigour and transparency of assessment while managing the parties’ expectations and provide a basis for informed decision making at the appropriate time. William F. Halsey, albeit in a different context, suggested that:


“All problems become smaller when you confront them instead of dodging them.”


Time element losses vary depending on the duration of the recovery period. In this context, we refer to operational Business Interruption (BI), or Delay In Start-Upii (DSU) losses occurring in the construction sector.

Loss adjusters continue to play a crucial role in the assessment of time element claims, including time and cost factors. Assessment activities also involve other specialists, such as forensic accountants.

The assessment of many of these claims can be complicated, involving analysis of the pre- and post-C19 trends and progress, and the various mitigation options available – which will be specific to the locations and sectors of the insured parties’ operations.

Loss adjusters will be seeking to identify disruption and prolongation, then apportion any concurrency between:
  1.  Covered perils
  2.   Policy Exclusions
  3.   Factors not explicitly excluded but appear to be uninsured.                                                              

‘But For’ tests, serial or independent causes of loss, trends and wide-area damage are terms often mentioned, with experienced and professionally qualified loss adjusters understanding and considering these and other policy-specific factors to support insurers’ early decision making.

There can be various methods of calculating BI claims, with forensic accountants often running calculations using two or three approaches. Similarly, DSU claims are occasionally described as ‘BI in 3-D’, with their assessment being an ‘art’. In such cases, insurers’ early engagement with insured parties, with the support of loss adjusters and forensic accountants, could avoid more costly disputes later.

Loss adjusters are well versed in the quantum assessment activities but are more effective the earlier they are involved. Forensic accounting can complement these activities, providing guidance to the insured parties, applying professional rigour and instilling confidence as to the amounts under consideration (and potentially in dispute).

Working together, adjusting teams can progress assessment activities so the parties can approach resolution - once Policy liability issues are resolved - with a detailed understanding of the amounts in dispute, and losses attributable to the different causal aspects. Indeed, those insurers positioned to conclude open claims, immediately on the resolution of liability issues, may strengthen their client relationships and benefit reputationally.

According to CEDRiii,


“Where there is a willingness to resolve a dispute, tackle a problem or take

preventative action, an appropriate process can be found.”


Advanta’s loss adjusters and forensic accounting teams are actively involved in C19 assessment activity and will be pleased to discuss any issues you may be facing.

Enquiries to:

Adam Humphrey, Executive Director          
Forensic accounting: George Viar, Managing Director

Regional contacts:

Middle East: Jim Pittman                              

Americas: Jose Miguel Varela                        

Advanta Global Services is a multi-disciplinary insurance consultancy, with offices in more than 55 countries. Services include Loss Adjusting, Forensic Accounting, Quantity Surveying, Risk Surveying, Engineering Consulting. Loss Adjusting technical lines include Construction & Engineering; Energy, Power and Renewables; Property and Casualty. For more information, see


i Financial Conduct Authority, the UK’s financial services conduct regulator (see
ii Sometimes referred to as Advance Loss of Profits (ALOP)
iii Centre For Effective Dispute Resolution. Quote from The CEDR Mediator Handbook, 4th Edn., October 2004.