You run an insurance company, and part of doing so is making sure that you are not being defrauded. When a consumer makes a claim, you need to verify its accuracy and make sure that they are being honest with you.
It’s a good idea to have an attorney on your side when you’re making those decisions, because there is always the chance that a business or individual that you’re insuring will allege that you did not fulfill your obligations to them.
One of the ways that you can protect yourself is by using alternative dispute resolution (ADR) to avoid a trial with the accuser. Your attorney may be able to offer negotiation services to help you reach a reasonable settlement with the client who is alleging that you didn’t fulfill the terms of the contract.
Why use ADR to stop a bad faith insurance claim?
It’s a good idea to use ADR for bad faith insurance claims because it helps you keep the case out of the courtroom. Many times, clients simply feel that they have not been heard and that they haven’t been treated fairly. Through ADR, you’ll both have an opportunity to present your case. You may choose mediation, where you and the other party can discuss your dispute openly, or you might opt for the more structured arbitration, which is more like a private trial.
There are always going to be people who claim that they aren’t getting enough out of their policies. It’s your job to make sure they get what they deserve, but you shouldn’t have to fulfill claims that aren’t covered through the insurance policy that was purchased.