While bad weather could cause problems for a business, a hurricane might prove devastating. Physical damage may shut an enterprise down, leaving the owner without any cash flow. Business owners might hold an insurance policy that offers “business interruption” coverage, but Louisiana policyholders could submit a claim in good faith only to find the claim denied. Thankfully, legal options exist for those who believe that a claim received a wrongful denial.
Be mindful of riders and exclusions
Business interruption coverage could prove helpful when a business shuts down due to a covered reason, cannot generate revenue and has bills to pay. The coverage may address losses such as payroll, relocation, rent and more. If the insurance policy notes coverage for hurricane-forced shutdowns, then business owners may have a valid claim.
Policyholders need to understand that an insurance policy will only pay for covered losses. If a loss is not in the contract, then the company has no obligation to pay. Therefore, if business interruption coverage does not appear in the contract, a policyholder cannot expect to receive a settlement.
Also, business owners must be mindful of any exclusions. The policy may state that something is not covered. If estimated tax payments are excluded, for example, claims for tax obligations will likely receive a valid denial.
Not all denials may be valid, though. Taking legal action against an insurance company that refuses to pay could be worth pursuing.
Legal actions against denials
First, policyholders must review their insurance contract to determine if business interruption coverage requires a rider. If so, then purchasing the rider becomes essential. Otherwise, there’s no basis for a claim.
Business owners who are unsure about how the riders work, what’s covered and what may require additional rider purchases could consult with an attorney. The attorney may review the contract and explain things to the client.
If a client files a valid claim, the insurance company may deny it on questionable grounds. Business interruption coverage could protect a proprietor’s financial interests after a hurricane, so unfair denials might require taking legal action against the insurance company.