It is a basic part of a business’s overall blueprint for success to carry the insurance it needs. As is the case with individuals, businesses rely on their insurance companies to pay up when there is a claim. After all, that is why businesses pay premiums.
Unfortunately, it happens too often that insurance companies do not pay claims when they should. Sometimes, they deny valid claims improperly, while it other times they offer a lowball settlement.
In still other cases, they take longer than they usually should to process a claim, leaving a business with a significant financial burden.
The law may seem to leave businesses with few options in these situations. While they might be able to complain to a regulator, this will not necessarily improve their position. They still have to weigh the costs of fighting an insurance company that is reluctant to pay.
Having a skilled and experienced insurance coverage advocate may help a business get the full benefit of the insurance policy they purchased.
Insurance companies have a duty to defend against covered lawsuits
An insurance dispute can be especially frustrating when a business has been sued and expects its liability insurance company to provide a defense.
If the insurance carrier does not respond promptly and effectively, a business could wind up forfeiting important legal rights and may be on the receiving end of a massive money judgement for which the business is responsible.
When an insurance company does not defend a covered lawsuit, the company is responsible for covering the judgement.
The law surrounding the duty to defend can be complicated. It depends heavily on how court in New Jersey and New York have interpreted various laws and doctrines, and the terms of the policy contract are also important too.
Generally speaking, a business should at least question an insurance carrier’s decision not to defend a lawsuit that it submitted to the carrier.