The forensic accountant will be measuring the income loss resulting from the inability of the ABC's kiosk owners to conduct business. In addition, ABC is turning to their policy for the future loss of income resulting from their inability to place orders for the holiday season. In this case, there are several considerations that the forensic accountant will have to contemplate and discuss with the carrier as it relates to the application of the policy.

Should the carrier determine that the period of restoration ends on the date and time that the systems are restored, does this preclude the forensic accountant from considering the future loss of income that may occur due to reduced inventory levels at the kiosks resulting in their inability to fulfill demand anticipated to occur during the holiday shopping season?
Can the forensic accountant consider the immediate increase in sales experienced at various kiosks once the system is restored and the kiosks begin operations? Will the carrier consider the increased sales as "make-up" or "delayed revenue," and if so, what is the reasonable length of time to include these increases as an offset to lost sales?
Does the policy's Dependent Business Loss clause respond to the businesses selling the merchandise to ABC's kiosks for the orders that were not placed? In this case, if coverage is determined for the Dependent Business Loss, it will be subject to a sub-limit.

The policy in this case will also respond to the consequential reputational loss, which will be during the notification period which is the 30-day period beginning on December 10 when the two million customers are notified. The forensic accountant will be measuring the income loss that ABC is prevented from earning as a direct result of the damage to ABC's reputation caused by the actual security breach. The analysis of the income loss for this period will be complicated by the potential loss of income experienced due to reduced inventory levels because of the inability to place orders.

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Keys to subrogating a cyber claim - Part 2

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