The Most Common Reasons for Commercial Insurance Claim Denials

Commercial insurance protects businesses in the event of property damage from fires, water leaks, vandalism, and other events. It should provide the financial resources for restoring the business to pre-loss conditions while maintaining it during repair.
Unfortunately, many business owners never receive this compensation. Their insurers deny their commercial insurance claims, refusing to pay the proper amount.

Top Causes for Insurance Claim Denials

Here are some of the most common reasons that insurers deny commercial insurance claims:

  • Alleged delays in filing the claim: Most policies have strict time limits for reporting commercial property damage to the insurer. A delay in reporting can become a reason for the insurer to deny the claim.
  • Alleged premium payment lapses: Even a small lapse in payment can become a reason for an insurance company to deny a business insurance claim. Ensuring continuous coverage is key to protecting your business.
  • Insufficient documentation: Careful documentation is necessary to establish that the damage occurred. For that reason, many business owners prefer to work with a lawyer from day one. Business owners can get the guidance they need to provide the right information the first time—avoiding any unnecessary delays or denials. (Of course, even when business owners provide the right information, insurers sometimes act in bad faith and say they did not receive it. If this has happened to you, call an attorney.)
  • Exclusion clauses: Some business insurance policies exclude certain types of damage, like flood damage, for example. If your policy excludes the type of damage you experienced, your insurer will likely refuse to cover it. It’s critical to thoroughly read and understand your policy before harm occurs.
  • Failing to mitigate the damage: Most insurance policies require business owners to take certain steps to limit the extent of the damage. If they allegedly do not, the insurance company may not compensate them for all of the harm done to the property.

Has Your Insurer Denied Your Claim?

No matter why your insurance company denied your commercial insurance claim, one thing is true: it is critical to take decisive action quickly. You only have a limited amount of time to appeal the denial or you may waive your right to take action. Your lawyer will need time to assess the situation and put together a strong argument on your behalf. It is important to act as soon as you anticipate trouble.
We are standing by now to help. To talk with an attorney at The Fell Law Firm in Richardson, call 972-450-1418. Consultations are confidential.

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