If you've been a Victim of Fire or Water Damage
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It is crucial for a business that has suffered catastrophic damage to its building or equipment to repair the issue immediately. When a business is forced to shut its doors, it can quickly lose more in lost business than the repairs itself will ultimately cost. For this reason, many businesses carry commercial insurance. But sometimes an insurer can fail to fulfill its obligation to make a business whole. That can be as devastating as the original loss.
It’s not uncommon for commercial insurance claims to involve a large dollar amount. Unfortunately, the high value of a claim can lead an insurer to drag their feet. For instance, the insurer may want to hold onto their money for as long as they can, exert undue pressure on the business to accept an unfavorable settlement, or simply take extra the time for the necessary due diligence. While there’s nothing wrong with an insurance company doing due diligence, the other two examples involve the insurance provider putting their interests above the interests of the business. This type of behavior could be the basis of a bad faith claim.
Getting equipment and storefronts back up and running is important. Likewise, receiving monetary compensation for the business that was lost during the down time is just as important. An insurer that denies or delays payment on a valid claim only makes a difficult situation worse for a business. And if it turns out that your insurers’ actions were fueled by a profit motivation and not upholding their end of your insurance agreement, you may have a strong basis for a bad faith claim. It’s important to take potential bad faith claim to an experienced attorney immediately, so that evidence can be preserved and the appropriate steps can be taken timely.
One common area of conflict with corporate insurance claims is business interruption coverage. Business interruption claims often lead to disagreements give the subjective nature of determining how much an unexpected closure cost a business. For many businesses, receiving compensation for that business interruption is the difference between staying open and going under.
The disruption can trickle down throughout an entire business. For example, so commercial policies have separate compensation provisions for salary and hourly employees. Any disagreement over the amount owed for payroll could lead to employees going without their paychecks and eventually leaving the company.
The primary dispute related to business interruption coverage typically focuses on accounting and financial data, however. Your insurer will understandably want to see your accounts and the basis for your estimated amount of lost income. Unfortunately, disputes between the parties over the financial records is a major cause of delay during the claims process. In situations where there are amounts that aren’t in dispute, it’s common for a carrier to pay that amount of the claim while negotiating the difference with the business. A failure to do so could be evidence of bad faith.
When it comes to a bad faith claim, you are entitled to more than just the amount the insurance company should have originally paid. That’s because given the time that has passed, the damage to your business has only increased and only recovering the amount originally requested won’t make your business whole. A bad faith claim should seek the amounts it lost due to not having the necessary insurance payout early enough on top of the original damages. In select instances, your insurance carrier’s behavior may be so troublesome you are entitled to punitive damages and attorney’s fees. An attorney with experience in bad faith claims may be able to help you with the process. An attorney an also make sure that the claim proceeds without unnecessary delay.
Delay is something that needs to be avoided. The longer a claim goes unpaid, the longer your business faces financial uncertainty. You may find it difficult to obtain financing for your repairs as long as your business’ finances are unsettled. Even if you’re able to get a loan you may face steeper interest rates than if you were on firm financial footing.
If you find that your commercial insurance claim has been unfairly denied or delayed, contact an attorney with experience in bad faith claims immediately. Most attorneys handling bad faith claims will discuss your case with a free consultation.