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Bad insurance is also bad for your business
May 2, 2023
When you purchase a policy from an insurance company, you expect to be protected from certain losses – but this may not always be the case. Despite paying premiums and upholding your end of the bargain, your insurer may fail to come through when needed.
Bad faith insurance is a serious concern, and unfortunately, a significant percentage of businesses experience this problem.
You may encounter losses
If your insurance company fails to pay a claim, you may need to dig into your own pocket to cover repairs for anything from broken glass to a burst pipe, which can be expensive – or even disastrous for your business.
Another way you may incur losses due to bad faith insurance is when you need to close the business. For instance, when your area experiences a natural disaster that destroys your property, and the insurance denies your claim.
You may suffer health issues
Using the water damage example, bad faith insurance can lead to health issues. If you don’t have the costs to repair the damage immediately, you may need to wait. This can lead to mold growth, endangering you, your employees and your clients.
Further, when you experience a major issue, such as property damage from a natural disaster, and the insurer refuses to cover the expenses, you may never recover enough financially to reopen, and that can lead to significant mental distress.
The insurance industry has questionable systems. For insurers to make more profits, they need to reduce payouts, which can disadvantage policyholders, especially businesses. If you have experienced bad faith insurance, you should get legal help to protect your rights.