Home » Women's Interest Articles » Common Business Interruption Claim Disputes in Arizona & Texas
Common Business Interruption Claim Disputes in Arizona & Texas
Business interruption insurance is a safety net for many companies trying to survive a sudden loss of income. Unfortunately, a rejected claim or delayed payout can cause a business to go belly up.
July 13, 2011 /Womens Interest PR News/ -- Because of a disaster that causes downtime, business owners may face an abrupt and immediate loss of income. When disasters such as a hurricane, tornado or fire occur, people naturally feel an immediate deep concern for homeowners. However, businesses that are damaged or destroyed from such events are equally devastated. Because of this menacing threat, many businesses purchase business interruption insurance.
Business interruption insurance protects companies experiencing a total or partial shut-down of its operations by providing them with a temporary stream of income. When Arizona and Texas businesses are experiencing an unanticipated economic loss due to a disastrous event, they rely on the payout of their business interruption claims to survive the tough times. Unfortunately, the business interruption claim can be disputed or delayed by the insurer, often with the survival of the business hanging in the balance.
Some Typical Business Interruption Claim Disputes
One of the frequent causes of Texas and Arizona interruption claim disputes concerns the measurement of the economic loss. Claim disputes can get extremely contentious when the business and insurance company have widely differing projections as to what the company's income would have been had the disaster not occurred. Simply put, it's in the insurance company's own interest to be as pessimistic as possible about the company's projected revenue stream so they offer to payout a low-ball amount.
Another common cause of disagreement derives from the "business interruption values" of the policy. When the business interruption insurance policy is first created, there may be a disagreement on financial values such as the company's annual earnings, maximum foreseeable loss (MFL) or probable maximum loss (PML). The disagreement in valuation may go unnoticed until the unfortunate event of a hurricane, tornado or fire occurs and the affected business seeks payout of its interruption insurance claim.
Another typical business interruption claim dispute, bad faith, is far less technical. It involves the insurance company's stonewalling, partial payout, or complete rejection of the insured's claim. However, insurance bad faith isn't always obvious. The big, intimidating insurance company can use insurance jargon, monetary figures and other tactics to confuse the policyholder into thinking their claim rejection, undue delay or reduced payout is legitimate.
Keys for Companies in Business Interruption Insurance Claims
While there is no surefire way to prevent insurance companies from using bad faith or conniving tactics on your business interruption claim, there are several things business owners in Texas and Phoenix can do to reduce the chances of a drawn out commercial business insurance dispute:
- Review your policy beforea claim-worthy event occurs: Any misunderstandings or disagreements can balloon into an insurance dispute lawsuit should disaster strike.
- Closely document your business: No matter the size of your business, keep detailed records of your revenue, expenses, receipts, etc.
- Scrutinize insurance correspondence and payouts: What may seem straightforward and initially fair may later be revealed as an undervalued payout.
Of course, when a business interruption insurance claim gets unfairly denied, low-balled or stonewalled, an experienced business interruption claim attorney can level the playing field and give you a strong and informed voice in your insurance dispute.
Article provided by Doyle Raizner LLP
Visit us at www.doyleraizner.com
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