Insurance is designed to reduce the financial risk posed by the possibility of certain occurrences, such as natural disaster, flooding, fire, and negligence to individuals and businesses. Property can be insured against various occurrences, a business’s revenue stream and assets can be insured against various occurrences, and individuals and businesses can insure themselves against the possibility of their own negligence (which might cause a financial loss to another person or business).
Many people and business representatives go to a broker, tell them their insurance needs, purchase one or more insurance policies, and maintain payment of the premiums. They assume that everything will be okay if disaster strikes because they have insurance. Oftentimes this ends up being the case, but sometimes insurers refuse to pay at all, or pay less than what you think they should, after an occurrence gives rise to an insurance claim.
Common reasons insurers provide for denial of coverage include that the occurrence was not a peril covered by the policy, that the occurrence is not covered because of an exclusion clause in the policy, or that the insured failed to disclose a material risk at the time they bought the policy. Sometimes insurers deny claims on the basis that they are made out of time or that the correct process to make a claim was not followed (such as not providing a document known as a Proof of Loss).
Other times, claims are not outright denied, but are valued at a lesser amount by the insurer than the insured party. This can be because the insured has less coverage than they thought they had. For example, the insured might only have coverage for the market value of their insured property at the time of the loss, not coverage for the cost to replace the insured property, or there might be limits on amounts the insurer has to pay out no matter what the actual loss is. This can also happen because the insurer’s valuation of the loss is simply less than the insured’s valuation of the loss.
In the event that an individual or business is accused of being negligent and causing a loss to another party, their liability insurer is normally required to step in and defend their insured. Oftentimes they do. However, sometimes insurers will refuse to do this on the basis that what happened is not covered or is excluded from coverage under the policy, that the insured did not notify their insurer of the claim against them in time, or that the conduct of the insured post-loss vitiates coverage because, for example, the insured did something to prejudice their defence.
If you are having issues with an insurance claim or with your insurance company, our lawyers can help. For all of the situations mentioned above, there could be solutions. It may be that there is a good argument that the claim should be paid, that the amount of the payout should be higher, or that your insurer should be required to step in and defend you against a lawsuit brought against you or your business. In some instances, it may be that there is an argument for a remedy against your insurance broker too, for under-insuring you or your business.
Don’t blindly accept your insurer’s decision — call one of our lawyers to find out your options. Our lawyers will be best able to assist if you provide a copy of the denial letter from your insurer and a copy of the insurance policy wording. If you think you have an action against your insurance broker, it is best if you can provide copies of any written communications between you and the broker or notes you took of any verbal conversations. We understand that you might not have all these documents but please gather as many as possible before calling one of our lawyers.
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