1. Business Interruption The CPA’s Perspective November 12, 2009

2. Background Charles S. Amodio, CPA, CFF, MBA Partner Bollam, Sheedy & Torani, CPA ’ s (BST) 26 Computer Drive West Albany, NY 12205 (800) 724-6700 camodio@bstco.com Specializing in Economic Damage Claims Business Interruption Lost Profits No-Fault Automobile Claims

3. What do you know about Business Interruption?  Business Interruption Insurance  What impact will a business interruption have on your business?  Do you have a plan in place to deal with a business interruption?  Will you be able to successfully document a business interruption loss?  Business Income Loss Calculations

4. Business Interruption Insurance Coverage  Do you have business income coverage?  What are you covered for?  Limitations to coverage  Do you have sufficient coverage?  Is the coverage right for your business?

5. Impact of a Business Interruption  Loss of sales  Loss of customers/clients long-term  Loss of production  Employees and staff  Loss of inventory  Loss of records  Facility and equipment loss  Bankruptcy  Stress

6. Business Interruption Plan  What is your first reaction?  Temporary facilities  Mitigating the loss  Outsourcing  Lease agreement  Recordkeeping  Backup financial information  Up to date with tax filings  Review insurance coverage annually

7. Documenting a loss  Annual income tax records and/or financial statements  Monthly Profit & Loss statements  Sales records  Payroll records  Extra expense  Inventory records  Asset listings  Segregating business income loss by divisions  Accounting Software

8. Understanding how losses are calculated  Losses are not based solely on lost sales or net income  Economic Loss  Net Income plus continued expenses  Gross Profit less discontinued expenses  Seasonality  Make-Up sales/Deferred Sales  Unrecorded sales  Rental properties  Equipment losses based on replacement cost