Suppose you own a small business just outside of Chicago. It is a small retail establishment that you have been operating for about 5 years. Business is good and your clientele is loyal to you. You are fully licensed and you pay your liability insurance on time every month. Do you have options when insurance will not pay your claim?
One day, a client slips and falls on a broken tile and is seriously injured. You feel terribly for the client and you jump through all the hoops your insurance company put in place. Unfortunately, your insurance company refuses to pay the claim. They argue that you failed to maintain the property. Therefore, they are not obligated to pay out to your client. You implore them to pay and note that you inspected the floor only 2 or 3 days before. They still refuse. Your customer wants to know who is going to pay their medical bills. At this point, they are considering suing you and your insurance carrier. What are your options when insurance will not pay your claim?
Avenues Of Recovery
In this situation, there are three ways to try to get your insurance company to pay. First, and the area of our concern in this article, is to sue them for breach of contract. Second, you can file a claim under the Illinois Consumer Fraud Act. Finally, you can pursue a tort action against them for fraud.
Breach Of Contract
An insurance contract is a unique type of contract under the law. You are essentially paying another entity to protect you against the claims of a third party. If another party sues you, the insurance company typically moves in as a surrogate in your place. It defends your interests and is usually empowered to approve or deny settlement offers. Because of the position the insurance occupies, some courts in Illinois recognize a cause of action in insurance contract cases. This is called breach of an implied duty of good faith and fair dealing. This simply means that in dealing with a third party claim against an insured, an insurance company is required to act in your best interests. This is regardless of the actual terms written into your insurance policy or contract.
Illinois law provides an additional avenue of relief that is found in Section 155 of the Insurance Code. This section allows some additional relief where an insured can prove that the delay or denial on the part of the insurance company was vexatious and unreasonable.
Insurance companies have the means to fight in court. If you choose the right attorney, you too can have a great deal of legal firepower. Section 155 allows the court to make the insurance company pay your attorney fees upon a finding of bad faith, so the right attorney is especially important.
Our attorneys have decades of experience helping business owners when insurance companies do not make good on their policies. It is a complex field of law and experience can make a huge difference. If you are in the Chicago area and have insurance difficulties, please call us at (312) 223-1699 to set up your initial consultation. Put more than 120 years of experience to work for your business today.