Bad faith litigation is an area of law that many people are unfamiliar with. But business agreements depend upon each party’s ability to carry out the obligations outlined in a contract. So understanding bad faith litigation is essential to protecting your interests.
Bad faith disputes often result from claims made against insurance companies. But they can also arise out of other business agreements.
The following will help you understand bad faith litigation so that you know how to protect yourself from the denial of benefits and obtain the compensation that you deserve.
Understanding Bad Faith
Insurance companies that take steps to avoid having to settle claims or issue compensation are deemed to be acting in bad faith.
Although Georgia residents cannot sue insurance companies for the actions taken by a third party, they can make a claim against insurance providers in cases where that provider has prioritized the company’s interest over those of their insured clients.
Insurance companies may attempt to delay payments to insured parties. In other cases, they may claim that the insured individual cannot be issued any payments through the use of loopholes and other tactics.
Types of Bad Faith Claims
Bad faith litigation occurs as a result of a wide range of actions taken by insurance companies. These include the denial of coverage without reason or failing to conduct an investigation into a claim.
Issuing a decision whether to accept or deny a claim must be made in a reasonable amount of time. Failure to do so can also lead to bad faith litigation.
In some cases, liability has already been established, and the insurance’s failure to reach a settlement can be an act of bad faith.
Insurance companies must also provide details related to any denial of a claim. Policy limits must also be disclosed to insured parties. More importantly, insurance providers must be willing to enter negotiation processes when seeking out a settlement.
The failure to do any of these can lead to a bad faith claim, as the insurer has breached its duty to its clients.
Compensation for Bad Faith Claims
There are a number of factors that determine how much compensation is granted in bad faith litigation cases. In many cases, the plaintiff’s compensation may be limited to an amount that equals the benefits that were denied by the defendant.
But some insurance companies may face penalties equal to half of the benefits that were denied along with having to compensate plaintiffs for legal fees. This occurs in cases where insurance providers have acted in bad faith and serves as a form of punitive damages.
Protecting Your Rights in Bad Faith Litigation
Individuals who have fallen victim to bad faith actions by insurance companies or other organizations have some legal options to recover losses. In the United States, a person has the right to take legal action against insurers who act in bad faith.
Bad faith claims are typically resolved through arbitration or other legal processes.
Having the right legal assistance can help you and your family obtain the compensation you deserve. In addition, compensation for any pain and suffering may also be granted depending on the circumstances of your case.
A skilled attorney with experience in bad faith litigation can help you determine the value of your case as well as the options that are available to you.
More importantly, your attorney can help you navigate the often complex process of resolving a bad faith litigation dispute.
You’ll be able to review your policy so that you have a full understanding of the damages to which you’re entitled so that you fully recover the benefits or coverage that are rightfully yours.