Insurance Bad Faith for WA Business Owners

Warning signs may include:

• Unexplained or repeated delays
• Failure to conduct a thorough investigation
• Ignoring estimates, reports, or financial documentation
• An offer that does not reflect the actual cost of repairs or replacement
• An unexplained or inconsistent denial
• Misrepresenting the policy or available coverage
• Repeated requests for information already provided
• Pressure to accept payment before the full loss is known
• Delaying payment while the business remains closed or partially operational

Not every disagreement is bad faith. However, a pattern of unreasonable conduct may indicate that your insurer is not handling the claim fairly.

Yes. A commercial claim does not have to be completely denied to be mishandled.

An insurer may agree that a loss is covered while still undervaluing:

• Building repairs
• Equipment replacement
• Inventory losses
• Contractor labor and materials
• Code-required upgrades
• Business interruption losses
• Continuing operating expenses
• Temporary relocation costs
• Lost profits
• Extra expenses incurred to keep the business running

An unreasonable underpayment can leave a business unable to complete repairs, replace essential property, or resume normal operations.

Bastion Law takes most insurance bad faith cases on a contingency-fee basis. This means there are no upfront attorney fees, and we are paid only if we recover compensation for you.

In some successful Washington insurance cases, the insurance company may also be required to pay reasonable attorney fees and litigation costs. Whether attorney fees can be recovered from the insurer depends on the claims, the outcome of the case, and the applicable law.

We will explain the contingency fee, responsibility for case costs, and any potential recovery of attorney fees before representation begins.

Business interruption coverage is intended to help replace lost income and cover certain continuing expenses when a covered property loss disrupts operations.

Depending on the policy, coverage may include:

• Lost net income
• Payroll
• Rent or mortgage obligations
• Utilities
• Taxes
• Loan payments
• Temporary operating locations
• Extra expenses required to reduce the interruption

Business interruption claims can become complicated because insurers may dispute how long the business should have been closed, how much income would have been earned, or whether certain expenses are covered.

The calculation typically relies on the business’s historical and projected financial performance. Records may include:

• Profit-and-loss statements
• Tax returns
• Sales reports
• Payroll records
• Bank statements
• Inventory records
• Budgets and forecasts
• Prior-year comparisons
• Seasonal sales information
• Records of continuing and additional expenses

The insurance company may use its own accountants or consultants to evaluate the loss. Business owners should carefully review the assumptions, time periods, and financial information used in that calculation.

Disputes often arise over the appropriate period of restoration—the amount of time reasonably required to repair or replace damaged property and resume operations.

An insurer may argue that repairs should have been completed faster or that the business could have operated from another location. But the actual timeline may depend on contractor availability, permitting, equipment replacement, safety concerns, supply delays, and the insurer’s own handling of the claim.

These facts should be evaluated before accepting a reduced business interruption payment.

Washington insurers are required to handle claims fairly and in good faith. They must reasonably investigate claims, communicate with policyholders, and provide a basis for their coverage and payment decisions.

Depending on the circumstances, a business may be able to pursue unpaid policy benefits, financial harm caused by the insurer’s conduct, attorney fees, and other remedies available under Washington law.

The available claims and damages depend on the policy, the insurer’s actions, and the losses the business experienced.

Bastion Law can:

• Review the commercial insurance policy and available coverage
• Examine claim correspondence, estimates, reports, and payments
• Evaluate the insurance company’s investigation and decision
• Identify property, income, or expense losses that may have been overlooked
• Work with contractors, accountants, public adjusters, engineers, and other professionals
• Handle communications with the insurance company
• Negotiate for a fair resolution
• Pursue litigation when the insurance company refuses to resolve the claim appropriately

Yes. Public adjusters and attorneys perform different roles and may work together on a commercial insurance claim.

A public adjuster can help document the property damage, prepare estimates, calculate portions of the loss, and present the claim to the insurer. An attorney evaluates coverage disputes, legal rights, and whether the insurance company’s conduct may violate its contractual or legal obligations.

Bastion Law works with public adjusters and other claim professionals when their documentation and experience can help establish the full scope and value of a business loss.

It may be time to seek legal guidance when:

• The claim has been denied
• Payment has been delayed without a clear explanation
• The insurer has made a payment that is far below the documented loss
• The insurer disputes business interruption or lost-income calculations
• Important estimates, reports, or financial records are being ignored
• The insurer’s position or explanation keeps changing
• The delay is preventing repairs or reopening
• The insurance company asks the business to sign a release
• The claim involves a significant loss or complex coverage dispute

A business does not necessarily need to wait for a final denial before having the claim reviewed.

Before accepting the insurance company’s decision:

1. Request the decision and its reasoning in writing.
2. Ask which policy provisions the insurer relied upon.
3. Preserve photographs, videos, damaged property, and inspection reports.
4. Keep estimates, invoices, receipts, and repair records.
5. Maintain detailed financial records documenting lost income and continuing expenses.
6. Record claim-related calls, delays, and requests for information.
7. Avoid signing a release without understanding its effect.
8. Speak with an attorney who handles insurance coverage and bad faith disputes.

Insurance policies and legal claims may be subject to deadlines. Waiting too long can limit the options available to the business.

Helpful records may include:

• The commercial insurance policy
• Coverage, reservation-of-rights, or denial letters
• Claim correspondence
• Property damage estimates
• Contractor and repair invoices
• Photographs and videos
• Public adjuster reports
• Engineering or inspection reports
• Profit-and-loss statements
• Tax returns
• Sales and payroll records
• Inventory documentation
• Records of lost income and extra expenses
• Payments issued by the insurer

You do not need to have every record collected before contacting Bastion Law.