Put yourself in the shoes of a small but profitable business, that purchased an insurance policy to protect itself from being ruined in the case of an unforeseen event. Then, imagine the exact event you protected your business against comes to pass and your insurer has denied your claim.
An insurance denial could ruin the financial viability of your business operations, so it’s important to investigate the issue to determine your legal rights and options.
The most common reasons for an insurer to deny a business’ claims
The first step in challenging the denial of your claim is to determine the exact reason for the denial. Here are four of the most common reasons for denial and how a business can prevent them from happening.
Your claim was filed in an untimely fashion: Most insurance policies will have time limitations associated with the claims. For this reason, it’s vital that your business files a claim for insurance benefits as soon as the compensable damages present themselves. You should also familiarize yourself and other officers at your company regarding the details and limits of your policy to prevent the filing of a late insurance claim like this.
The policy does not cover the injuries or damages: Sometimes the coverage of a particular insurance policy will be a point of argument for a business and the insurance company. Make sure you know what kind of policy you’re buying and that it covers all possible instances of injuries or damages you wish to protect your business against.
The insurer believes your business submitted a fraudulent claim: Fraudulent claims are common in the insurance industry and your insurance company will be on the lookout for any suspicious elements related to your claim. Therefore, it’s important that you save photos, videos and copies of all elements related to your claim to ensure that your right to receive benefits is as clear as possible.
You exceeded your coverage limits: Your insurance policy will have coverage limits that apply to it. Whether you have a $50,000 or $50 million insurance policy, if the damages you wish to claim surpass this amount, you will only be able to receive the benefits promised by the policy.
Was your business denied insurance benefits?
A thorough investigation of the facts and circumstances associated with the denial will reveal the next steps your business can take regarding a denial of benefits. In some cases, you may also be able to cure the deficiencies associated with your claim by submitting further information. Also, make sure that you fully understand the insurance policy to determine whether you have the right to contest the denial of benefits in court if you can’t resolve the problem by other means.