Insurance companies in Ohio may face a wide range of claims due to the actions of the companies they cover. Some of these claims may be false or dubious, and an insurance company might reject them. Other claims, however, might refer to activities that took place at the business premises of which the insurance company was unaware. Some insurers may find that the companies they provide coverage to are engaging in dangerous, fraudulent or negligent practices that could cost the insurance company thousands or even millions of dollars in settlements.
Insurance companies may want to settle legitimate claims and defend their insured parties against illegitimate or exaggerated attempts to profit from a small accident or innocuous incident. However, in some cases, a claim may raise serious concerns about the nature of their client’s business practices. In one case, a client of an addiction treatment center filed suit against the company, making a range of allegations involving medical negligence, consumer protection and vicarious liability issues. The company sought protection and coverage from its insurance company, which initially claimed that it did not provide coverage for the charges in the lawsuit.
The insurance company refused to pay a settlement to the plaintiff, saying that many of the claims involved related to areas outside the scope of its coverage. For example, the insurer said that it was unaware that any inpatient treatment was performed at the facility. However, after the insurance company faced a potential bad faith lawsuit, it paid the settlement but then sued the addiction treatment center for misrepresenting its business practices.
Insurance can be vital to businesses seeking protection, but insurance companies may also find themselves on the hook for behavior they never agreed to. An insurance defense attorney may help companies to protect themselves against fraudulent claims.