Business insurance is one of those lifesaving decisions that can rescue a business from ruin. Unfortunately, there is one more obstacle between you and reconstructing your business – the insurance company. You probably assume that you file a claim and it will be approved in a matter of days, if not weeks. Unfortunately, your insurer only makes money if you pay premiums and never pays out claims. This creates a perverse incentive sometimes to deny valid claims.
This post will go over how to respond to a denied insurance claim. Your first step is to prepare the response. The response is your first attempt to appeal the denial. To prepare the response, you need to read the notice of denial very carefully. The notice will contain all of the reasons why the insurer denied your claim. Denials are frequently issued for the following reasons:
- The insurer suspects fraud
- The injury is not covered by the policy
- Coverage limits were met or exceeded, or
- The claim was not filed timely
Once you identify the reason for the denial, you need to review your business insurance policy carefully. The policy will contain everything you need to know from coverage limits to the types of injuries that are covered. Then, once you are armed with both pieces of information, you can be drafting your response.
Your response needs to refute each of the reasons for denial carefully. You should also present additional evidence, such as photos, signed affidavits, or anything else that supports your assertions. The insurer may revise its response or deny your appeal.
If your claim is denied, you may want to contact a lawyer; you could have a lawsuit for bad faith insurance. Bad faith insurance arises when an insurer wrongfully denies coverage. An attorney can carefully review the facts, be sure to bring the notice of denial, your response, and all supporting pieces of evidence – to determine if you have valid grounds for a lawsuit. You don't want to go into civil court without the advice of an attorney; bad faith claims can get very complicated, very quickly.