Your commercial insurance policy’s coverage can make the difference between surviving a crisis and having to close your doors. If damage that you sustain falls under a policy’s exclusion, you could find yourself with a large potential claim that the insurance company will not pay. Therefore, it is important to know your policy forward and backward before you agree to it. This is why you need an attorney to review your corporate insurance policy before you sign it.
It seems that everywhere you look these days, there is large nationwide litigation about policy exclusions and insurance companies’ refusal to pay claims. This became apparent during COVID-19 when many insurance policies refused to cover claims relating to business interruptions. The result was that scores of businesses faced catastrophic losses without any recourse. While no one could have predicted a major pandemic, business owners were taken by complete surprise when the policy that they thought would protect them did not.
Business Insurance Policies Do Not Stay the Same
The truth is that business insurance policies are always changing. Insurance companies are very diligent about protecting themselves from having to pay out too much money in claims. If there are ever a series of adverse court decisions or a large number of claims relating to a certain aspect of liability, you can be sure that they will be adding language to policies to limit their own liability. This is just how they operate.
Accordingly, if you had any assumptions about what a corporate insurance policy may cover, they may have been correct previously but not today. However, based on frequent changes that insurance companies make to protect their own bottom line, you can never assume anything about a policy, no matter what you are told. At the end of the day, the insurance broker’s word will not mean much should a dispute above coverage arise. The court will go immediately to the contract they drafted and no place else.
An Attorney Can Point Out Coverage Gaps
Oftentimes, insurance coverage disputes can revolve around one word in a policy or even a comma. While the average business owner may be financially savvy, they may not be able to interpret every word of a policy with the same level of expertise as an attorney. One need only think back to the years’ long court battle after 9/11, where the leaseholder and the insurance company had a multibillion dispute over whether each building falling was a separate occurrence under the policy.
In many cases, business owners end up surprised after the fact when their claim is denied by the insurance company. While it may seem like they are playing word games, when it comes to a contract, words matter. At least when your attorney reviews the insurance policy ahead of time, they can point out gray areas that have the potential to cause problems later in the future. While nobody can be expected to point out every possible dispute and contingency, you would at least have an understanding of where an insurance policy may not do what you think.
Further, when your attorney closely reads the policy before you sign it, they may point out some areas where you could negotiate for some changes. You are not completely at the mercy of every insurance company when you are taking out a policy. You may be able to request that words or phrases be changed. While an insurance company may not agree to large-scale changes without raising the price of your coverage, they could allow some revisions to give you more clarity.
Having an attorney review your commercial insurance policy prior to signing it is the best way to protect your rights and ensure you understand your coverage. They will be able to let you know how the law may look at certain disputes under the policy ahead of time. At the end of the day, if your corporate insurance policy does not provide you with the coverage that you need, you can either get a different policy or continue to shop around.
Contact an Insurance Coverage Attorney
For help with your complex insurance coverage matters, call Michael J. Faul, Jr.of Herold Law today at (908) 647-1022 or contact him online. Michael has decades of experience working for policyholders to obtain recoveries from insurance companies and helping businesses understand their coverage. As a business owner, it is your responsibility to know what you are getting when you sign up for coverage or renew a policy, and an attorney can help you make sure that you do.