Insurance Bad Faith – Business Clients*
Including Unreasonable Denial and Delay Claims Under C.R.S. §§ 1115/1116
Businesses buy insurance to protect themselves against certain risks, such as liabilities of the company, officers and directors, employee conduct, accidents caused by the company’s products, decisions or employees, damage to company property, interruption of revenue due to a calamity, or any number of other types of losses. In return for paying a premium, your insurance company promises to assume those risks by paying benefits in accordance with the policy when the business gets sued or otherwise suffers a loss.
The most important types of business insurance are:
- Professional liability insurance – This is also commonly referred to as errors and omissions insurance, and it protects your company in the event of any claims of negligence as a result of mistakes or “failure to perform.”
- Property insurance – This is basically homeowners’ insurance for your commercial property, and it typically covers any equipment or inventory, as well as the structure itself, against theft or fire.
- Workers’ compensation insurance – Workers’ compensation insurance is a must once employees are brought into the business.
- Product liability insurance – This policy covers your business if you produce a physical product for consumer consumption. If your product injures someone, this policy is meant to protect your company.
- Business interruption insurance – These policies cover your business in case your day-to-day business operations are interrupted.
- Management liability insurance – This type of insurance helps protect companies from a variety of board-level exposures. Products can include crime insurance, directors and officers’ liability insurance, employment practices liability, and fiduciary liability insurance.
Unfortunately, insurance carriers frequently fail to pay the benefits they promised they would, or they fail to do so promptly and in the proper amounts. These actions by the insurance company could be classified as bad faith (a breach of the duty of good faith and fair dealing).
If you suspect that your company’s insurance carrier is acting in bad faith by refusing to live up to their promises and provide your business the insurance coverage included in the policy, your business could be entitled to file a bad faith claim against the insurance company. Call the Colorado commercial litigation lawyers at Burg Simpson today at 303-792-5595 to discuss your case.
There are a number of ways in which an insurance company can act in bad faith, such as:
- Misrepresenting the pertinent facts or the provisions of the insurance policy.
- Failure to investigate a claim filed under the policy.
- Failure to acknowledge a filed claim under the policy.
- Failure to pay a valid claim.
- Failure to pay a valid claim in a timely manner.
- Advising or suggesting that a claimant should not hire an attorney.
- Failure to settle a claim within the stated policy limits.
- Failure to properly defend their insured against lawsuits.
Getting experienced legal counsel involved early is critical in placing the business in the strongest possible position to hold the insurance company responsible to honor its obligations, and to do so in a timely manner. If you feel as if your insurance carrier is acting in bad faith, whether it is by denying a claim or if they are just taking too long to respond to a claim, you need help in getting your insurance company to do the right thing. Call an experienced Colorado corporate litigation attorney right now at 303-792-5595 before it is too late.
Insurance companies operate at a distinct advantage over policyholders. They write the policy, set the premiums, oversee the claims process, and ultimately decide whether to pay your claim. They have more experience, a superior bargaining position and far more resources than their typical policyholder.
While the specifics vary from state to state, there are a number of things insurance companies are obligated to do, such as:
- Act in good faith, honestly, and through fair dealing.
- Pay off a claim in a timely manner.
- No low-balling through unreasonable evaluations of claims.
- Conduct a thorough investigation of the claim.
- Explain your policy to you, and let you know what information is needed to adjust the claim.
- Explain any claim denials to you.
- Make a prompt decision regarding coverage upon receipt of a valid and complete claim – in Colorado, that decision must be made and communicated with 60 days.
If you are convinced that your insurance carrier is breaking these rules, you need the help and guidance from our veteran Colorado insurance bad faith lawyers. Do not try to negotiate a claim with your insurance company on your own. Call Burg Simpson immediately at 303-792-5595.
In Colorado, the insured must establish two things when making a bad faith claim:
- The insurer’s conduct was unreasonable under the circumstances.
- And, the insurer either knowingly or recklessly disregarded the validity of the insured’s claim.
If your insurance company has acted in bad faith, and treated you unfairly, you could be entitled to compensation, which can include:
- Amount of benefits due under your policy.
- In Colorado, double the denied or delayed benefit amount, plus attorney fees and losses if the denial or delay was unreasonable.
- Resulting economic losses, including future earnings.
- Punitive damages, if it is discovered that the insurance carrier acted willfully.
If your insurance company has acted in bad faith, and they refuse to work with you, call the Colorado corporate litigation attorneys at Burg Simpson as soon as possible at 303-792-5595.
There are a number of things you – and your company – can do to communicate more effectively with your insurance company, including:
- Ask the adjuster to confirm all requests for information in writing.
- Do your best to give the insurance company all the information they ask for, within reason.
- If you have questions about why the insurance company needs certain information, ask them about it.
- Confirm in writing all promises and representations the adjuster and insurance company make to you (e-mail works well for this).
- Be assertive, but polite.
- You are allowed to challenge the insurance company’s adjustment numbers (including the scope of the damage caused by the loss, the replacement cost, rates of depreciation, and more), even those generated by a computer program. It is important that you get your own estimates, as well.
- Ask your insurance company to provide you with their estimates and the basis of all adjustments and payments.
- Ask your insurance company to explain to you anything you do not understand. They are obligated by law to do so.
- Talk to a lawyer well-versed in the areas of insurance and bad faith.
CALL A DENVER CORPORATE LITIGATION LAWYER AT BURG SIMPSON
Businesses often have multiple policies covering different risks. It is important to have someone with expertise in reading policies who can counsel your business on which policy or policies to direct the claim. You do not have to be the victim of an insurance company that is acting in bad faith. Call a Colorado bad faith insurance lawyer now at 303-792-5595.
* For bad faith litigation involving personal injury claims, please find more detailed information here.