Proving an Insured Loss: Policyholders Need Experts Too


Some policies or packages include loss preparation costs in the basic coverage, usually under a clause referred to as, “professional fees.” Following are some examples.

6. “Professional Fees. We will pay up to $________ for the costs payable to your auditors for producing and certifying particulars or details of your business that we require when loss or damage occurs to insured property.”


This provision clarifies that “auditors fees” are covered, subject to whatever limit is shown. It is not clear, however, whether the insurer intends “auditors” to be used in a descriptive sense — meaning anyone who “audits” or compiles figures, or in a more defining way, limiting the term to an actual professional “auditor.”

7. “Auditors Fees: We will pay reasonable fees you are obligated to pay your accountants or auditors, subject to the insurance stated below, for:
  • A. Producing and certifying particulars or details of your business expenses, profits, or losses when
  • B. required by us to determine the business loss you sustain; following
  • C. a covered cause of loss of property at the premium stated below, causing such a business income loss, but
  • D. only when we have stated a limit of insurance in the declarations for business income insurance.”


This clause is intended for use with time element coverages. It limits coverage to the amounts which would be shown as limits of insurance for each location listed in the schedule, and to fees paid to “accountants or auditors.” It is unclear whether the insured can be reimbursed for anyone performing accounting functions such as a public adjuster who prepares the business interruption claim.

8. “This policy covers the necessary and reasonable fees incurred by:
  • A. The insured’s customary auditors, accountants;
  • B. architects or engineers with mutual agreement during loss settlement between the insured and this company’s loss adjuster, except the insured’s own employees, for producing, preparing and certifying details of a claim resulting from a loss payable under the time element endorsement coverage provided by the policy. This coverage is not subject to the reporting or adjusting clauses of this policy. Limits of liability for such professional fees shall not exceed $________ or ________ percent of the adjusted claim, whichever is smaller.”


This clause, also used with time element coverages, seems to limit payment to the four professionals cited, and specifically excludes the insured’s own employees. Coverage is limited to the dollar amount listed or a percentage of the loss, whichever is smaller.

9. “Professional Fees Coverage. Amount of insurance under the Employee Dishonesty Coverage includes an amount payable to auditors/ accountants, except the insured’s employees, for producing and certifying particulars or details of the insured’s business, as required by the insurer, in order to arrive at an amount payable in the event of a loss.”


This clause, which only applies to fidelity claims, is quite open-ended—with no limitation on the amount of coverage available or the type of outside professionals that are used. It specifically excludes the cost of using the insured’s own employees.

10. “This policy is amended to include architects and engineers fees incurred in repairing a covered loss. Inventory and appraisal costs are included, in addition to public adjuster and consultant fees in any covered loss adjustment.”


No limit is shown for these extensions other than any applicable policy limits. Public adjuster and consultant fees are also specifically covered.

Some of the selected policies and endorsements that we examined, while providing loss adjustment fee coverage, severely limit the amount of insurance. Examples 11 through 13 illustrate that point.

11. “We will pay the extra wages you pay your employees for preparing inventories and other loss data for completing our proof of loss. We do not cover any other expenses incurred in preparing or submitting claims.”