Monthly payments for facilities, worker wages and other ongoing financial obligations create a minimum amount of income that is necessary for a company to continue running. When something unforeseeable occurs, such as a supply chain disruption caused by international conflict or a local natural disaster, businesses may temporarily become unable to operate. Business interruption insurance can help cover basic costs until a company resumes operations.
What if an insurance company doesn’t honor a valid policy?
Interruption claims can be costly
Insurance companies, like any other business, largely operate on a for-profit basis. They must take in more in policy premiums than they pay out due to large claims. Professionals working for insurance companies often try to minimize large claims or find reasons to deny them.
If the cause of an operational interruption clearly falls within the scope of the policy but an insurance professional refuses to approve a claim or offers a settlement so low that a business cannot cover necessary expenses, the insured party may have grounds for a bad faith insurance lawsuit. When companies do not honor their policies as written, it is sometimes necessary to take legal action.
In some cases, coming to the negotiation table with legal representation can be enough to motivate the insurance company to honor its policy. Other times, actually filing a lawsuit may be necessary. Successful bad faith insurance litigation can lead to not just a payout that aligns with the policy but additional compensation due to the insurance company’ violation of its own policy terms.
Reviewing a business interruption insurance policy with a lawyer can be helpful for those frustrated by delayed or denied claims. An attorney can help business owners pursue the coverage they need and hold insurers accountable for failing to uphold their policies and obligations under the law.