Most successful businesses carry a number of different insurance policies. There are various forms of liability that the organization needs to address, including premises liability and product liability.
Companies may also carry insurance to address routine operating expenses when the business cannot function as it usually does. Business interruption insurance can protect organizations from insolvency due to supply chain disruptions, natural disasters and other uncontrollable circumstances.
Unfortunately, insurance companies may give business leaders the runaround when they need to use their business interruption insurance. How can executives and owners handle a denied claim for business interruption coverage?
Litigation may be the best option
Insurance companies must uphold the policies they issue in good faith. They should not misrepresent policyholder rights or deny valid claims. They also should not force companies in need of immediate capital to wait for weeks for coverage from a policy that the business has long carried.
Business interruption insurance can cover worker wages and the costs of their ongoing benefits, such as health insurance. Business interruption insurance can also pay for rent or loan expenses and other recurring costs.
Without coverage, business leaders may need to take out loans or could be at risk of facing unmet expenses. They could struggle to meet their contractual obligations to workers and other parties.
When there is a policy in place and circumstances meet the standards outlined in that policy, business leaders may have grounds for a bad faith insurance lawsuit after a denied claim. Reviewing policy paperwork and current organizational challenges with a legal professional can help business owners hold their insurance companies accountable for refusing to uphold their policies.