When a commercial property is damaged, business owners turn to their insurance providers for help in covering the associated costs. In certain circumstances, however, insurers will dispute the claim even if there is covered damages present. When these disputes occur, it can lead to legal action being pursued by one or both sides. Because of this, business owners should be aware of what to expect when lawyers for insurance companies get involved in claims disputes.
The Role of Lawyers for Insurance Companies
When an insurance claim is disputed, insurance companies often hire lawyers to protect their business interests. Insurance defense lawyers may work for independent law firms or as in-house counsel for an insurance company. Heavy regulation within the insurance industry often requires legal assistance by focused counsel who remain up to date on any handling of insurance litigation.
Insurance companies can also utilize legal counsel to determine whether the types of contracts and business practices the company is involved in comply with various regulations. Because both federal and state laws govern insurance, insurers find that what is legal in one state doesn’t always apply in another state.
In the event a policyholder’s valid claim is denied, insurance companies will most often retain a lawyer to represent them. In these cases, the insurer’s legal counsel will evaluate the claim under the applicable policy and state laws to determine whether or not the claim was wrongfully denied. Policyholders should be aware that this is designed to work in the insurance company’s favor to protect the interests of the insurer and not the insured.
Insurance Adjusters and Legal Defense Counsel
In Texas, when a commercial property suffers damage, the owner(s) will likely file a claim with their insurance company. Once the claim has been filed, the insurer will then send out an adjuster to assess the damage.
Insurance adjusters are ultimately responsible for determining the value of the property damage. Adjusters will review the damage to determine whether or not it is covered, and if so, how much. Adjusters’ reports typically include photos and videos of the damage, statements from those directly involved in the claim, and testimony from relevant experts. Insurance adjusters can work directly for an insurance company or be an independent, public adjuster who is hired on an ad hoc basis.
According to the Texas Insurance Code, adjusters must be appropriately licensed under Texas law, be over 18 years of age, claim residency in Texas, and complete all necessary training. While lawyers for insurance companies often don’t get involved unless a policyholder’s insurance claim has been delayed, underpaid, or denied to provide defense for the insurer, they can handle a claim in place of an adjuster. It’s important to note, however, that in these instances lawyers cannot render services different than those of a non-lawyer claims adjuster. This is because, according to Section 4102.156 of the Texas Insurance Code, an insurance adjuster cannot render any services or perform acts that constitute the practice of law, such as providing legal advice.
While business owners may feel at ease by having an adjuster assess their claim, in most cases adjusters rarely help the policyholder. More often than not, insurance adjusters make poor witnesses, draw conclusions that are not supported by the investigation, and are biased in favor of the insurance company.
One example of poor claims adjusting occurred with the company Tri Investments, Inc., which suffered damage to its commercial properties following a wind and hailstorm. The hailstorm caused significant damage to the business’s buildings, including compromising roofing and subsequent interior damages – all of which had been photo-documented in the claim. Despite having a wealth of evidence to prove the covered damage had occurred, Tri Investment’s insurer sent out two adjusters who were unqualified and incapable of adequately assessing the damages to these specific types of commercial properties. Additionally, the adjusters were responsible for grossly delaying the claims process, as they took months to even attempt to fully assess the damage. Once the review of the damage was finally complete, the claim was wrongfully denied due to the adjusters’ poor inspection.
When events like this happen, it can be devastating for commercial property owners who only want to get their businesses back up and running. Despite their continued efforts to undermine valid claims, insurance adjusters can be held liable for their own misconduct, even when acting on behalf of an insurance company. To ensure claims are properly assessed and policyholders aren’t taken advantage of by their insurance company, its legal counsel, or faulty adjusters, they should retain counsel from an insurance coverage law firm.
Get Help With Your Commercial Property Damage Claim
At Raizner Law, we’ve represented thousands of clients in claims against most major insurance companies for damage to commercial property damage. Contact our office today to see how we best can assist you with your claim.