Insurance is essential for a business to protect assets, manage risks, and ensure continuity.
What Types of Insurance Disputes Are Common in Business?
Most business owners carry several types of insurance to help mitigate the risk of operating a business in a litigious society. Disputes can arise involving various types of insurance, including the following:
- Commercial property insurance: This coverage protects business property against damage caused by theft, vandalism, fire, and natural disasters. Disputes can arise when insurance companies deny claims or offer insufficient compensation.
- Liability insurance: Commercial liability insurance is designed to protect a business from lawsuits arising from third-party bodily injury or property damage. When an insurer refuses to cover a claim or offers an inadequate settlement, it can leave your business exposed to risk.
- Errors and omissions (E&O) insurance: This type of insurance covers negligence or inadequate work claims against a professional services business. Disputes may arise between insurers and policyholders as to whether a particular incident is covered by a policy.
- Directors and officers (D&O) insurance: In case of a lawsuit related to the roles of directors and officers, D&O insurance helps protect the personal assets of company executives. Insurance companies may deny claims on the basis of policy exclusions or improper disclosure.
- Business interruption insurance: Loss of income due to natural disasters and other unexpected events that prevent normal business operations is covered by business interruption insurance. Insurers may challenge claims by arguing that the event is not covered or by undervaluing the extent of the loss.
