What To Do When Your Business Interruption Claim is Wrongfully Denied
Business interruption insurance protects against loss when a business must close due to a specific event preventing normal operations. This coverage often keeps businesses afloat until the issue has been resolved or the danger has passed, and business can resume.
You may be the victim of bad faith insurance practices if you own a business and have tried to collect on a business interruption claim in Arizona or San Diego to have it wrongfully denied. Let Dawson & Rosenthal, P.C. fight against the corrupt practices that put businesses in unnecessary financial danger.
Contracts are Binding
Insurance policies are contracts between a business and an insurance company requiring both parties to fulfill their obligations outlined in the document. A failure on either party’s part to meet their responsibility is a breach of contract. Understanding what is covered in an insurance policy and if additional policies are needed is critical.
Civil authority coverage may be included in business interruption. However, many business owners were shocked to learn their business interruption insurance did not cover closures mandated by law during the early days of the COVID-19 pandemic because of the inclusion of clauses brought on by the 2003 Severe Acute Respiratory Syndrome (SARS) outbreak that excludes closures due to bacterial and viral infections after insurers lost millions. Understanding the policy’s language is imperative.
Business interruption insurance often covers the expenses of rent and lease payments, loans, employee wages, and other costs, excluding damage. The coverage can take the financial pressure off a business when earning revenue is impossible.
Ambiguous Language Does Not Benefit the Contract’s Drafter
Challenging a claim denial in court will require the court to review the language in the document to assess whether or not the insurance company breached the contract. Contract law observes a rule rendering vague language against the party constructing the contract, which enforces that when a contract is drafted, it should allow for understandable language.
Proving the language in an insurance policy to be dubious will require an in-depth knowledge of contract law. Once a court has decided the contract’s language could be misconstrued, it will be up to the business owners to prove the losses did occur during the business interruption. Keeping thorough documentation is necessary and will benefit a claim if it goes to court.
Review the Insurance’s Decision
Once an insurance denial is received, review their denial for a statement explaining the reason for the decision. Then, check your policy to ensure their decision aligns with the policy. If the determination is questionable, then seek legal guidance immediately.
Insurance companies seek to minimize claims as much as possible to protect profits. The interruption of a business can be costly. And failing to honor a contract is unlawful.
Fight Back Against Bad Faith Insurance Practices
Standing your ground against an insurance company can get contentious. The circumstances surrounding the business interruption are overwhelming, but having an insurance company deny a claim wrongfully can push individuals to their stress limits. If language is proven unclear in an insurance contract, then a court tends to side with the party covered under the contract.
Dawson & Rosenthal, P.C. will fight for your business, helping to ensure a business interruption claim is fulfilled. We work with clients throughout Arizona and San Diego, California, to stand against insurance bad faith. Contact us online today!