Schedule An Initial Consultation 918.770.4335


How Should My Small Business Handle Denials of Insurance Claims?

Posted by Jonathan Krems | Sep 29, 2022 | 0 Comments

In this week's Freedom Friday blog and email newsletter, I want to discuss an important topic, especially for those in the construction industry, which is where this seems to happen the most.  A few months ago, a prospective client contacted me who is a home builder, and when I got him on the phone, he told me he had been sued, and he was looking for legal advice.  The first thing I asked was to see the Petition, and because it mentioned negligence, I asked him if he had contacted his insurance company, because if there was coverage, they would obtain an attorney for him to defend his small business in this lawsuit.  I also said that if there was some other issue, for him to call me back.  The good news for him was that his insurance company got involved, and they got his business an attorney to represent him in this lawsuit.  However, what should he have done if his insurance company denied him coverage?  That's the topic of today's Freedom Friday blog and email newsletter.  How should my small business handle denial of insurance claims?

First of all, if you own a small business, you need to have a commercial general liability insurance policy in place to protect your small business.  Especially if you have any kind of physical presence (and you are not a virtual small business), you need to have an insurance policy to protect against anything as minor as slips and falls, or property damage.  That's the first step in protecting your small business.  What can happen, though, is there's a slip and fall on your property, or some other property damage claim, and your business gets sued or makes some other kind of claim with your insurance company.  Then, the insurance company turns around and denies coverage for that claim and won't cover the claim against your small business.  What should you do then?

The first step in this type of situation is to try to resolve this decision over the telephone, or perhaps hire an attorney to review your insurance policy and send a letter to your insurance company attempting to resolve the issue with them.  However, if none of that works, your attorney should sue the insurance company for a declaratory judgment, and possibly bad faith.  Your attorney also needs to cite in the lawsuit the language in the insurance policy which requires the insurance company to cover the loss or claim for which they have denied coverage.  Often times, the insurance company would rather cover the loss or claim, or at least provide your small business an attorney if your business has been sued, rather than defend a lawsuit against it for declaratory judgment and/or bad faith.

Thinking about starting a small business?  Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.

For more information about Liberty Legal Solutions, LLC, please visit our website at

About the Author

Jonathan Krems

Jonathan is the Founder and Managing Attorney of Liberty Legal Solutions, LLC, a law firm dedicated to building, protecting, and defending the business and personal interests of our clients in Oklahoma.  Jonathan's primary practice areas are business law, contracts and agreements, business liti...


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Contact Us

Liberty Legal Solutions, LLC, is committed to answering your questions about Business Law, Contracts & Agreements, Business Litigation including Breach of Contract Disputes and Commercial Claims, Outside General Counsel services, Local Counsel services, and any of our other practice areas.

We offer a free consultation and we’ll gladly discuss your case with you. Contact us today to schedule an appointment.

Schedule Your Consultation Today

Email: [email protected]

Phone: (918) 770-4335