New York businesses may carry a number of different types of commercial insurance. From premises liability coverage and errors and omissions protection to business interruption policies, each form of insurance coverage helps mitigate a company’s exposure and limit its financial liability.
When a business faces claims from outside parties, operational disruptions or damage to its facilities, filing a commercial insurance claim can help cover the resulting losses. In some cases, insurance professionals stonewall large claims by refusing to communicate with policyholders or even acknowledge the claim. That may be indicative of bad faith insurance practices.
Communication during claims is mandatory
State laws in New York thoroughly regulate the insurance industry to prevent bad faith practices. Insurance companies have a legal obligation to uphold their policies as written and honor valid claims. That process requires active communication.
When a policyholder submits an initial claim or proof of loss documents, the insurance company must acknowledge the claim in writing within 15 days. The failure to do so could be an early warning sign of bad faith practices. Intentionally stalling claims is one tactic used to frustrate policyholders and limit successful claims.
In some cases, delayed claim payments can also increase the expenses incurred by the claimant organization. Unreasonable delays are among the most common grounds for bad faith insurance lawsuits.
Business leaders frustrated by insurance company tactics may need to partner with a legal professional familiar with bad faith insurance litigation. Violations of state regulations and the terms of a policy itself can potentially lead to compensation for the parties dealing with insurance company misconduct.