As a business owner, you have obligations to many people, including your landlord or mortgage company and employees. Those obligations continue to accrue regardless of how lucrative your business is. You have probably set aside capital or obtained revolving lines of credit to cover temporary downturns in income, but sometimes those resources won’t be enough.
When circumstances arise that prevent your business from operating, you may turn to business interruption insurance to cover your costs. These policies can cover your necessary expenses when your business closes temporarily due to factors outside of your control. Unfortunately, you may find that your insurance company isn’t so eager to pay the benefits that you should receive through your policy.
A delayed claim payout is a form of bad faith insurance
Given that insurance companies have a profit incentive to reduce how much they pay, there are many federal laws that regulate the insurance industry. Among the regulations that apply to insurance providers, the obligation to pay valid claims in a timely manner is arguably the most important for policyholders.
In the case of business interruption insurance, insurance companies may be well aware of the fact that your company won’t be able to survive without those benefits. They might intentionally delay paying a claim even after they approve it in the hopes that your business will go under and they will not have to compensate you.
When your insurance company refuses to pay an approved claim or approve a valid claim, you may have no choice but to take action against them in order to protect your business and get the coverage you have paid for already. If you’re fighting an insurance company that’s slow to pay, it may be time to reach out to an attorney.