Category: Loss adjusting · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed 2026-06-11
A forensic loss adjuster is a loss adjuster who combines forensic accounting and investigative skills with insurance knowledge to quantify business interruption, fidelity, crime and other complex economic loss claims.
Category: Loss adjusting Also known as: Forensic adjuster, Forensic accounting adjuster, Business interruption adjuster Related concepts: Loss adjuster, Chartered Loss Adjuster, Business interruption insurance, Fidelity insurance
A forensic loss adjuster is a specialist loss adjuster who applies forensic accounting, investigative and analytical techniques to the quantification of complex insurance claims. The term “forensic” derives from the use of accounting and investigation methods that would withstand scrutiny in a court of law, and forensic loss adjusters frequently produce reports relied on as expert evidence under Civil Procedure Rules Part 35.
The work typically focuses on classes where the quantum question dominates the indemnity question: business interruption (loss of gross profit, increased cost of working, additional increased cost of working), money and crime (fidelity guarantee, theft of money, computer crime), stock loss reconciliation, contingent business interruption (denial of access, customer/supplier extensions), and economic loss claims under D&O, PI and warranty and indemnity (W&I) policies.
Forensic adjusters often combine CILA qualification with accountancy qualifications — typically ACA (ICAEW), ACCA, CIMA or US CPA — and many are also Members or Fellows of the Institute of Chartered Accountants’ Forensic Accounting Faculty. Some hold additional qualifications such as the Certified Fraud Examiner (CFE) credential.
The role is investigative as well as quantitative. A forensic adjuster will typically interview employees and management, examine financial records, audit working papers and management information, reconstruct trading patterns from primary records, model loss scenarios using tools such as Excel and specialist forensic software, and present findings in detailed reports often running to hundreds of pages. The reports may be relied on in mediation, in litigation between insurer and insured, and in subrogated recoveries.
Forensic loss adjusters operate within the same overarching framework as other loss adjusters, but with additional regard to forensic accounting standards and litigation rules. The Insurance Act 2015 governs the duty of fair presentation in commercial business interruption claims; section 3 requires the policyholder to disclose material circumstances or to give the insurer sufficient information to enquire. Forensic adjusters investigating misstatement or over-statement of pre-loss trading performance frequently rely on the Act’s remedies in Schedule 1.
The Theft Act 1968 and the Fraud Act 2006 underpin the forensic adjuster’s work on fidelity and crime claims. The Fraud Act introduces three principal offences: fraud by false representation (section 2), fraud by failing to disclose information (section 3) and fraud by abuse of position (section 4). The Computer Misuse Act 1990 covers unauthorised access and modification of computer systems, relevant to computer crime claims.
For business interruption claims, the principles established in The Financial Conduct Authority v Arch Insurance (UK) Ltd [2021] UKSC 1 and subsequent decisions (including Stonegate Pub Co Ltd v MS Amlin Corporate Member Ltd [2022] EWHC 2548 (Comm) and Greggs PLC v Zurich Insurance PLC [2022] EWHC 2545 (Comm)) have transformed the approach to causation and quantification of pandemic-related business interruption. Forensic adjusters working on these claims must apply the “but for” causation test established by the Supreme Court and reflect counterfactual analysis appropriately.
For expert evidence, Civil Procedure Rules Part 35 and Practice Direction 35 govern the duties of an expert in litigation. Forensic loss adjusters acting as experts owe an overriding duty to the court, not to the party instructing them, and must comply with the Civil Justice Council’s Guidance for the Instruction of Experts in Civil Claims 2014.
The FCA’s ICOBS 8.1 applies to claims handling generally. The CILA Code of Conduct requires independence and competence in forensic work. The ICAEW’s Code of Ethics applies to forensic adjusters who are Chartered Accountants, particularly the requirements of integrity, objectivity, professional competence, confidentiality and professional behaviour.
For fraud investigation, forensic adjusters must comply with the Proceeds of Crime Act 2002 (POCA) reporting obligations where suspicion of money laundering arises, and with the Bribery Act 2010 requirements where bribery is suspected.
A forensic adjuster’s caseload is typically smaller than a generalist’s but each case is substantially more complex. A major BI claim or large fidelity loss may take 12 to 36 months to resolve, with the forensic adjuster acting as the lead quantifier across the period.
The first step is typically a kick-off meeting with the policyholder, the policyholder’s accountants and the insurer’s claims handler, supported by a comprehensive document request. The forensic adjuster will request the trial balance, general ledger detail, management accounts, audited accounts (typically for three to five years pre-loss), VAT returns, payroll records, sales invoices and management information dashboards.
For a business interruption claim, the adjuster will then build a financial model of the policyholder’s trading position, projecting the “but for” position (what would have happened in the absence of the insured event) against the actual position. The model must reflect seasonality, trends, market conditions and any other relevant factors. Trends are particularly contentious: insurers will typically argue that downward trends should reduce the projected revenue, while policyholders will argue that the projection should reflect their planned growth.
Standing charges, gross profit ratio, the indemnity period and the policy’s specific definitions are all relevant. The forensic adjuster’s report should set out the assumptions, sensitivities and ranges within which a reasonable settlement could fall. On larger claims the adjuster will often produce alternative scenarios reflecting different views of the counterfactual position.
For fidelity and crime claims, the forensic adjuster’s approach is investigative rather than projective. The adjuster will examine the policyholder’s books and records to identify the misappropriations, reconstruct the perpetrator’s activity, and quantify the loss. This often involves interviewing colleagues, analysing email and computer evidence (with appropriate legal advice), and liaising with the police. The adjuster’s report typically forms the basis both of the insurance claim and of any civil recovery proceedings against the perpetrator.
Forensic adjusters also advise on subrogated recoveries against third parties — for example, against suppliers, contractors, professional advisers or banks whose acts or omissions contributed to the loss.
Within forensic adjusting, several distinct sub-specialisms have developed. Business interruption (BI) specialists focus on the modelling of loss of gross profit, increased cost of working and additional increased cost of working. They typically operate at the larger end of the market, with claims of £1 million or more.
Fidelity and crime specialists investigate employee dishonesty, third-party fraud, computer crime and social engineering claims. The rise of “CEO fraud” and ransomware attacks has expanded this specialism significantly since 2018. Forensic adjusters working on cyber claims often coordinate with incident response specialists, IT forensic firms and lawyers handling notification obligations under the UK GDPR and the Data Protection Act 2018.
Stock loss adjusters specialise in claims for damaged or stolen stock, where reconciliation against purchase and sales records is critical. The classic stock reconciliation methodology — opening stock plus purchases minus sales (at cost) equals closing stock — remains the foundation of this work.
D&O claim quantification, increasingly important as shareholder litigation grows, requires forensic adjusters with capital markets experience. W&I (warranty and indemnity) claim adjusting, arising under M&A insurance, has grown significantly since the mid-2010s and requires understanding of due diligence, sale and purchase agreements and post-completion disputes.
Pure forensic firms — RGL Forensics is the best-known UK example — sit alongside the forensic teams within the major adjusting practices (Sedgwick, Crawford & Company, Charles Taylor Adjusting, McLarens, Davies). Many forensic adjusters move between practice and consulting work, and some operate as independent expert witnesses on a self-employed basis.
Forensic loss adjusters should be distinguished from forensic accountants more generally; the loss adjuster role focuses specifically on insurance claims and involves applying the policy wording as well as the underlying accounting.
A national restaurant chain suffers a serious fire at its central kitchen and distribution facility, closing the operation for nine weeks. The policyholder claims £8.5 million under the business interruption section of its commercial combined policy. The insurer instructs a forensic loss adjuster who is a Chartered Loss Adjuster and a member of the ICAEW Forensic Accounting Faculty.
The forensic adjuster requests three years of management accounts, five years of audited accounts, monthly sales data by site, weekly cost data, and the policyholder’s budgets and forecasts for the relevant year. He visits the policyholder’s head office, interviews the CFO, the operations director and the marketing director, and walks the damaged premises.
He then builds a financial model of the policyholder’s trading position, identifying the following issues: a pre-loss declining trend in the like-for-like sales of the worst-performing brands within the group; the impact of a competitor opening 12 new sites in the same catchment areas in the prior year; and the impact of a marketing campaign that had been planned but was cancelled because of the fire. He concludes that the projected revenue for the indemnity period should be reduced by 4% for trend and that the marketing campaign should be excluded from the projection.
After nine months of negotiation with the policyholder’s accountants, the claim is settled at £6.2 million plus a contribution to professional fees. The forensic adjuster’s report, running to 220 pages with 60 appendices, forms the basis of the settlement and is shared with the reinsurer for the purposes of the cedant’s recovery under its per-risk excess of loss treaty.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Next review: 2026-12-11.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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