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Dawson and Rosenthal

Common Examples of Bad Faith Commercial Insurance

Thriving business can come to an instant standstill when unexpected events occur. A structural fire, commercial vehicle damage, flooding, weather damage, or vandalism are just a few of the examples of abrupt events that can severely impact your ability to do business. Business owners rely on commercial insurance companies to meet their needs to minimize the impact of the incident.

However, commercial insurance companies may ignore their obligation under insurance law in Arizona and California, using bad faith strategies to delay or deprive businesses of adequate or any compensation. Below, we look at examples of bad faith practices to be aware of in Arizona and California if your company is struggling to acquire payment in an insurance claim.

Commercial Insurance Bad Faith Practices

Bad faith practices should be reported in Arizona or California, and an insurance bad faith claim can secure the help you need when the following practices are used to avoid paying the compensation you deserve.

Deceptive Acts

Commercial insurance companies use deceptive practices in multiple ways. Enforcing exclusions that do not apply to your policy, withholding coverage information, or failing to disclose critical deadlines are a few of the deceptive tactics used to prevent payment of an insurance claim.

Irrational Delays

A timeline for a response to a claim by the insurance company is in place in each state. Failing to respond within the appropriate time frame can be considered an unreasonable delay. Keeping accurate records of dates, times, and with whom a conversation occurred is beneficial in pinpointing this practice.

Undervalued Payments

Insurance companies are businesses that are out to make money. Paying what a claim is worth does not benefit or profit them. It is common for insurance companies to offer quick settlements but at much lower values, hoping the covered business owner will take the payment, settling the claim before they become aware that the compensation is below the policy value and does not meet their needs.

Improper Investigations

A full investigation is required to determine the total extent of the damage. Failing to perform a thorough investigation goes against good faith and fair practices, often failing to adequately compensate businesses and restore them to where they were before the incident occurred.

Denying a Claim

Valid claims are denied regularly, leaving business owners unsure how to proceed. After making timely insurance payments, having an insurance company refuse to settle a claim can be maddening and frightening. Every insurance company should provide an explanation of why a claim is denied, and a failure to do so is a grievous bad faith practice.

What are the elements of a bad faith claim?

Business owners who feel they have suffered from commercial insurance bad faith practices should seek legal advice and file a state complaint immediately when the following elements of bad faith exist. If your policy benefits are being withheld from you and no valid legal reason exists for this action, an insurance bad faith lawyer in Arizona or San Diego can help you determine the next steps to take to receive compensation. Insurance agreements are legal contracts, and failing to honor them is acting in bad faith.

Contact a Bad Faith Commercial Insurance Attorney in Arizona or San Diego

An insurance settlement offer or denial should clearly state how a decision is reached, and a review of the insurance policy should better explain the guidelines used as determinants in the claims decision process. If the answers are unclear, contact Dawson & Rosenthal, P.C. to discuss bad-faith commercial insurance practices. Understanding the insurance industry and the applicable laws is complicated, and we are ready to help you navigate these systems in Arizona or San Diego.

Contact us online or call (800) 598-5017 to learn how we can help fight bad faith practices and to seek an appropriate settlement for your claim. Dawson & Rosenthal, P.C. offer decades of experience assisting clients in fighting insurance bad faith.