If you file a commercial insurance claim and it is denied, there may be a valid reason for that denial. Not all claims are approved, and there could be disputes over the evidence that has been provided or the provisions of your insurance policy in the first place.
However, a denial could also indicate that the insurance company is acting in bad faith, meaning that they are not upholding their obligations. When you purchased the policy, it put a contractual relationship in place between your business and the insurance provider. They do have an obligation to act in good faith and uphold this policy.
Baseless denials
One way that bad faith accusations can arise is when the insurance company denies a claim that should be approved. They do not have a solid basis for the denial, so you believe they are simply refusing to pay out the money that is due.
Unreasonable delays
Another issue is when the insurance company creates unreasonable delays and does not promptly investigate your claim. It is important for them to take time and do their due diligence, but they also have to act promptly and cannot delay the process just to keep from authorizing the payout.
Misrepresenting terms
Finally, the insurance company does have to operate fairly when addressing the terms in the policy. If they try to misrepresent these terms in order to justify the denial, it is another example of bad faith.
In all of these cases, it may be necessary to take legal action to pursue the compensation you deserve under the terms of the insurance policy. It is critical that you understand exactly what legal options you have.