Owning a small business requires accepting certain risks. Nonetheless, because lost income can be disastrous, you have business interruption insurance. if you cannot operate your business due to an unforeseen shutdown of some sort, this coverage provides compensation for your lost income. 

While you regularly pay insurance premiums, your insurance provider may not be so quick to act following a claim. If your insurer did not explain exclusions and later denies your claim, though, the company may be acting in bad faith. 

What are policy exclusions? 

It is possible to purchase insurance coverage for virtually all types of risk. Still, insurance companies regularly limit the scope of the coverage they provide. A policy’s exclusionary provisions eliminate your ability to recover for certain losses. 

For example, your general business policy may expressly exclude lost income from a business interruption. Similarly, even if you buy specific business interruption insurance, the plan may exclude certain types of interruptions or losses. 

What is bad faith? 

In West Virginia, insurance providers must act in good faith. That is, they must quickly process your claim and pay you for your covered losses. If your insurer fails to do so, it may be acting in bad faith. 

Here are some ways your insurance company may act in bad faith: 

  • Your insurer refuses to pay your covered claim 
  • Your insurer pays you less than your policy requires 
  • Your insurer unreasonably delays processing your claim 
  • Your insurer does not respond to your communications 
  • Your insurer misrepresents coverage or other material matters 

How may you recover for your losses? 

Insurance policies are often long and full of legalese. Still, if your insurance agent sells you a policy for business interruption, it may be reasonable to assume it covers income losses. The same is likely true if your agent includes business interruption protection in an overall explanation of your coverage. 

Either way, if your insurer misrepresents or fails to explain policy exclusions, you may have a valid bad faith insurance claim. If this claim is successful, you may receive the payout you deserve for your business’s lost income. 

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