Tag: Commercial Insurance

natural disaster claims

What Commercial Insurance Holders Need To Know About Natural Disaster Claims

One of the many lessons property owners learned after Hurricane Harvey is that natural disasters can cause catastrophic damage and total losses. While many property owners have insurance coverage for things like fires and leaky pipes, natural disaster claims are a little different than other types of commercial property damage insurance claims. Commercial property owners need to fully understand natural disaster claims to best protect their properties and financial interests.

Know Your Coverage

Many commercial property owners aren’t completely sure what is and isn’t covered under their policy. Does your policy cover total loss replacement? What is the deductible? Are there any policy limits? Do you have business interruption insurance? Understanding exactly how your property and your business are protected can mean the difference between getting an insurance payout to cover damages and paying completely out of pocket.

Immediately Report Damage

After a large-scale natural disaster like Harvey, tens of thousands of property owners will be filing natural disaster claims; therefore, it is important to report your claim immediately. Insurance carriers usually handle claims on a first come, first served basis, so you want to be at the front of line.

Claims Can Take Time

Commercial insurance claims can be complex, and natural disaster claims can make the processes take even more time. However, policyholders have a legal right to have their claim handled in a timely manner. If your insurance company is taking too long to process your claim, you need to contact an experienced commercial insurance lawyer to make sure your insurance company is operating in good faith.

Know What Your Property Is Worth

Commercial buildings can have specialty equipment or tools that many adjusters are unfamiliar with. This can lead to underestimates of replacement costs. Rebuilding after a natural disaster can be expensive, so if your insurance company has given you a lowball offer, do not accept the offer and contact an attorney.

Be Wary Of Surplus Lines Insurers

Surplus lines insurers largely dominate the commercial insurance market in Texas. These companies aren’t traditional insurance companies, and often operate more like file cabinets or foreign investment syndicates. When policyholders file claims with surplus lines insurers, there is no one to process the claim, so surplus lines insurers contract out with external adjusters to handle the claim. The surplus lines insurers incentivize these adjusters to deny or undervalue claims, so many policyholders end up paying out of pocket for most, if not all, of the repairs. To avoid making insurance payments, many surplus lines insurers routinely characterize storm damage as “wear and tear” or maintenance problems.

Don’t Wait To Contact An Attorney

Natural disasters can cost insurance companies billions of dollars in payouts. Some insurance companies will do everything in their power to avoid paying out on expensive claims. Policyholders shouldn’t have to deal with unfair insurance companies, but the reality is that many do. Getting an attorney involved in your claim can make sure claims are handled efficiently and help you get full coverage.

Corruption Inside Commercial Property Insurance

The Corruption Inside Commercial Property Insurance

From costly hail damage to a devastating water loss, a commercial property insurance plan is crucial in protecting your business from a variety of incidents; however, finding the right commercial property insurance for your business isn’t as easy as you’d think. Corruption inside commercial property insurance has left many business owners high and dry after a loss. This is particularly true in states like Texas, where the grey market surplus lines insurance industry has virtually taken over the entire market despite regulatory protections to the contrary. The best way to protect yourself from buying a bad insurance plan is to understand how, when, and why corruption happens during the insurance procurement process.

Insurance Infographic

When a business owner needs commercial property insurance, they visit a retail agent, who typically is just a sales group that does not have any authority to bind an insurance company. So, the retail agent contacts a producer, typically a licensed surplus lines broker, and this producer has the authority to bind an insurer. Under the law, the producing broker must conduct a “diligent effort” to obtain insurance from a legitimate, admitted and licensed insurer. Unfortunately, due to a lack of true oversight and financial incentives, the producing broker either skips the “diligent effort” process or just gives it a superficial lip service without truly complying. The result is that the producing broker most often obtains the policy from a surplus lines insurer, which is usually more costly and is an unregulated grey market that lacks financial guarantees.

Surplus lines insurers are typically really just a front – file drawer entity –and most or all of the true insurance risk is ceded to unauthorized foreign reinsurers that are neither licensed in the state nor legally authorized to conduct the business of insurance in the state. They are little more than offshore investment schemes. Because of this, there is no one locally available to do the work on behalf of the surplus lines insurer once a policyholder files a claim under his or her policy. The surplus lines insurers must use local managing agents, independent adjusters, and third party administrators to address the claim and any one of these individuals could have financial ties back to the surplus lines insurer or even the the foreign reinsurer.

The potential for conflicts of interest under these circumstances is rampant, and this can seriously impact whether a commercial property claim is paid or denied. Because of the parasitical structure of these financial investment schemes masquerading as insurance companies, the money flows to the various entities who all have their hands in the process instead of the business insurance customer who paid their premiums and expect protection when a catastrophe occurs. Policyholders insured through surplus lines carriers are subject to predatory practices by the insurers, they pay higher taxes and premiums, get policies that are not approved by state regulators and contain far less coverage, and their claims are often evaluated by unqualified, and sometimes unlicensed, out of state adjusters.

The market for surplus lines insurers is largely unregulated and has virtually no oversight. Many business owners unknowingly purchase policies with these insurers and suffer economic hardship when their claims are later delayed, denied, or underpaid. The various insurance entities and investors profit handsomely from this grey market structure, while business policyholders are left without the protections they have paid for.

Raizner Slania: Commercial Property Insurance Lawyers

Raizner Slania is experienced in fighting insurance companies who operate in bad faith. We handle all commercial property insurance litigation on a contingency fee basis, so you owe us nothing unless we help you recover financial damages. If your commercial property insurance claim has been denied, delayed, or underpaid, call the lawyers at Raizner Slania today for a free consultation.

Commercial Insurance

Commercial Plaintiff Sues Insurance Provider in Independence, Kansas

Our client, the owner of a multi-tenant office building, filed suit against Seneca Insurance Company after its property damage claims were denied and not properly paid according to Kansas law.

February 2015 Freezing Temperatures Cause Water Damage

On February 5, 2015, our client suffered severe property damage when freezing temperatures caused the boiler system in its commercial structure to fail. Upon realizing the damages, the plaintiff immediately filed an insurance claim under its policy for the water damage caused by the failed boiler.

April 2015 Wind and Hailstorm

On April 20, 2015, a severe windstorm and hailstorm caused property damage to the roof system, HVAC, windows, exterior, interior, ceilings, furnishings, and more. Again, upon discovering the damage, the plaintiff immediately filed another property damage insurance claim.

The insurance carrier assigned agents and adjusters to assess the property damage who were not qualified to handle these types of commercial property claims. Our client asserts that the adjuster performed a haphazard inspection of the property and refused to acknowledge obvious visible damage. Throughout the claims process, the insurance carrier refused to provide answers to questions presented by the insured and also otherwise delayed the process. Because of the inadequate inspection of the property, both commercial insurance property damage claims were denied and no payments were issued.

The Insurance Carrier Acted in Bad Faith

The insurance carrier wrongfully denied our client’s property damage claims for repairs under the insurance policy. Because of this, our client was forced to hire its own consultant, at its own expense, to independently evaluate the property damage. Our client’s consultant identified substantial damage far beyond what the insurance carrier and/or adjusters acknowledged. Despite this, the insurance carrier still refused to pay for necessary repairs to the property as required under the terms of the insurance policy.

Our client asserts that Seneca Insurance breached its contract by refusing to comply with its obligation to pay policy benefits, and breached its duty of good faith and fair dealing by not fairly and in good faith processing its claim and by refusing to properly investigate and effectively denying insurance benefits.

Commercial Insurance Claims Attorneys

If your commercial insurance carrier has underpaid, denied, delayed, or disputed a property damage claim, the experienced insurance litigation attorneys at Raizner Slania can help. We handle all bad faith insurance litigation cases nationwide on a contingency fee basis, meaning you will not pay us anything unless we help you recover on your claim. Please contact us today to discuss your case.

Commercial Insurance

The Difference Between Commercial and Residential Insurance

While you may be familiar with your own residential insurance policy, it’s important to understand that not all insurance policies contain the same terms. Commercial insurance policies have a few key differences to keep in mind when filing a claim.

  1. There may be several named insured parties. On a residential policy, the named insured are usually a married couple or an individual, but on a commercial policy, any number of parties could be listed depending on the ownership structure of the business or property. It is not uncommon that disputes under a commercial insurance policy center on who and what was covered. Make sure you understand exactly who and what is covered under your commercial insurance policy.
  2. A commercial policy will generally include several types of liability insurance. In a residential policy, the insured are generally covered against claims for premises liability, but a business requires additional coverage for its operations, products, and operations liability.
  3. You can receive compensation for lost business income. If you run your business out of your home, your residential homeowners insurance policy doesn’t cover lost business income. However, if an accident causes your business to shut down or interrupts your work, business interruption coverage can pay for the income you lose when you are unable to operate. The insured needs to be able to show the income it was generating both before and after the incident to receive compensation under its business interruption coverage.
  4. You may need different policies for multiple business Residential policies generally cover one property, but operating a business may involve several properties. While one policy can cover multiple properties, it will typically only do so if the properties have similar uses. If your business includes an office space and a factory as separate buildings, you may need different policies to adequately cover each.
  5. You can tailor your coverage to address specific risks. Residential insurance is much more standardized than commercial policies because businesses have a variety of different needs. You can choose coverage options to cover additional costs like valuable papers and records reproduction, meeting local ordinance codes when rebuilding, replacement of employees’ personal property, and more.
  6. While most residential policies are written by insurance companies admitted and fully licensed to conduct the business of insurance within the state, most commercial policies are now written by surplus lines insurers. Surplus lines insurers are not admitted in the state in which they are doing business, and are generally either loosely regulated or unregulated by the department of insurance. They are not backed by a state guarantee fund in the event they become insolvent, and often are just a fronting scheme for unauthorized offshore reinsurers who carry the real risk without any regulation or oversight. Buyers of commercial surplus lines insurance need to be very aware of what they are getting themselves into, and what the risks may be.

Raizner Slania Commercial Insurance Claims Attorneys

Commercial insurance claims are often much more complex than residential claims because the policies are often tailored to each business. Regardless of which coverage you choose for your commercial insurance, you have the right to hire an attorney to assist you with commercial insurance claims. The attorneys at Raizner Slania can examine your insurance policy to determine your available coverage and any payments you may be owed. If your commercial insurance claim has been denied, delayed, or undervalued, contact us today for a free consultation.