An insured’s belief about what was taken is not a proof of loss. The gap between the two is where most fidelity claims are actually decided.
Start a conversation with the Forensic Concierge, already scoped to fidelity claims & proof of loss. Pick a starting point, or describe the matter directly.
Insurers and sureties are a separate retention channel, and the posture is inverted. On every other page here the forensic accountant is building a record. On a fidelity or employee dishonesty claim, the accountant retained by the adjuster is testing one — separating transactions the documents support from those the insured has assumed, tracing the flow of funds, identifying losses attributable to third parties or to error, examining the control weaknesses that allowed the scheme to run, and reading all of it against the coverage questions. Two policy terms govern the whole exercise. The insuring clause typically requires a dishonest act committed with manifest intent, and the loss covered is direct loss, meaning an actual depletion of funds rather than a bookkeeping or theoretical figure.
The policy sets the questions, which is why this is coverage analysis before it is accounting.
What the policy covers in its own words, rather than the general idea of employee theft the insured arrived with.
The requirement that the act was committed to cause the insured a loss and to obtain an improper financial benefit. Its scope is heavily litigated.
Actual depletion of funds, as distinct from a bookkeeping or theoretical loss. It is the term that decides most disputed claims.
Which items the records support as improper, and which the claim has swept in without a document behind them.
Amounts attributable to third parties, to error, or to conduct outside the policy period, which a claimed figure often absorbs silently.
Many fidelity policies carry an allowance for the forensic accounting work itself, which is worth reading before the work is commissioned.
How a proof of loss is built, and how it is tested.
A fidelity claim is decided on records nobody kept for this purpose.
It is measured against the policy’s own definition of direct loss and against the historical record, not against a world in which the scheme never happened. That is why it belongs on this site. What the organization lost in consequence — disruption, lost profits, the cost of the response — is a damages question, and our Economic Damages Institute covers it.
Five things, and they are the same five whichever side is paying. Separate the transactions the records support as improper from those that are merely unusual. Trace the flow of funds far enough to establish whether the insured suffered an actual depletion. Identify amounts caused by third parties, by error, or by conduct outside the policy period. Evaluate the control weaknesses that allowed the scheme to run, which bears on coverage and on any subrogation claim. And integrate all of it with the coverage questions rather than producing a free-standing figure. An insured’s own accountant preparing the claim is well advised to run the same five tests first, because the adjuster’s accountant certainly will.
Because an estimate answers a different question. Most internal figures are built by fixing a period of suspicion and totalling everything anomalous inside it, which sweeps in items that are unusual but documented, items caused by someone else, items outside the policy period, and items that never left the organization at all. The policy asks about direct loss — actual depletion — and it asks item by item. So a claim is often reduced not because the insurer disputes that something happened, but because part of the figure is not evidenced to that standard. The gap between what an organization believes it lost and what it can substantiate is where these claims are decided.
No, though it is the closest this site comes to the line. Direct depletion is measured against the policy’s own definition of loss and against records that exist; a damages model measures against a counterfactual world. That is a difference of question, not of profession. Forensic accountants do damages work — the AICPA’s CFF and NACVA’s MAFF bodies of knowledge both include damages and lost profits, and the same practitioner may write both reports in one matter. What should not be blurred is the output. The moment the analysis moves from what left the accounts to what the disruption cost the business, it is a damages opinion and should be scoped and disclosed as one.
Usually on unglamorous grounds. In an Ohio insurance coverage dispute decided in April 2026, Metropolitan Design & Development, LLC v. Frankenmuth Mutual Insurance Co., No. 1:25-cv-38 (S.D. Ohio), the insurer moved to exclude a CPA forensic accountant on four bases: that her work was simple arithmetic and so not expert testimony at all; that she relied on financial information supplied by a company principal without verifying it; that she omitted working capital; and that she had departed from objectivity standards set out in her own publications. The court rejected all four, then excluded part of her opinion on relevance. Two lessons: an expert’s own writing is a live impeachment surface, and an opinion can survive every attack on its method and still be cut back on relevance.
Describe the policy, the period and what the records currently support. The Institute will help you see where a proof of loss is thin.