As a business owner, you need to be able to rely on your insurer. If they do not provide you with the appropriate support when you need to claim, it could be the end of the road for your business.

However, you are not the only business involved in the equation. The insurance company also needs to turn a profit for its shareholders. Therefore, your opinion on an acceptable settlement and theirs may differ. Does this mean they are acting in bad faith? Not necessarily.

You can only bring a bad faith claim for specific reasons

If there is a dispute over the amount of compensation, you can ask the insurer to reconsider. However, if the offer is far too low, and they know it, you might accuse them of acting in bad faith.

In short, a bad faith claim requires intent on the part of the insurer to cheat you out of money. There are numerous ways to do this :

• They refuse to contest your claim: An insurers’ job is to answer you when you need help. If they ignore you, it may be an intent to dissuade you from pursuing your claim.
• They ignore evidence to support your claim: If an insurer refuses your claim, they need to explain why. They have no excuse not to consider all the evidence you provide to support your claim.
• Policy issues: Insurance policy documents can be confusing. Yet insurance companies have plenty of experience writing them, so they should make them clear. If a court considers the insurer missold you the policy or set out to confuse you with ambiguous wording, it may uphold a bad faith claim .

Proving a bad faith claim can be challenging. However, you might not need to go that far. Sometimes showing you are willing to take legal action will be all you need to get the insurer to fulfill their duty.