Commercial property insurance is meant to be a safety net—a promise that when disaster strikes, your insurance carrier will step in, evaluate your loss fairly, and provide the compensation needed to restore your operations. Unfortunately, for many commercial property owners, that promise is often broken. As we enter 2026, bad-faith insurance practices are becoming more common, more subtle, and more damaging.
At The Voss Law Firm, P.C., we see it every day: commercial policyholders who did everything right—paid their premiums, documented their property, filed claims promptly—still find themselves battling delay tactics, underpayment strategies, or outright denial of legitimate claims. Our purpose is to stand up for these business owners, fight billion-dollar insurance conglomerates, and ensure our clients are not taken advantage of during their most vulnerable moments.
This article highlights the most common bad-faith tactics used by insurance carriers, why these practices are becoming more aggressive in 2026, and what steps commercial property owners can take right now to protect their businesses and their rights.
What Is Insurance Bad Faith?
Insurance companies owe policyholders a duty of good faith and fair dealing. This means they must:
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Evaluate claims promptly
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Communicate clearly
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Pay covered losses
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Not misrepresent policy language
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Not unreasonably delay or deny claims
When an insurer violates this duty, it is acting in bad faith.
Bad faith can occur at any stage of the claims process—from the initial notice of loss to the final settlement. Recognizing the warning signs early can help commercial property owners take action before the situation becomes financially devastating.
Why Bad-Faith Tactics Are Increasing in 2026
Several industry pressures are leading carriers to adopt more aggressive claim-handling practices.
1. Record-Breaking Catastrophe Losses
Natural disasters—including hurricanes, hailstorms, freezes, wildfires, and flooding—have created massive claim volumes. To manage financial exposure, carriers often delay or underpay claims rather than fulfill their contractual obligations.
2. Rising Inflation and Repair Costs
As construction and labor costs rise, claim payouts become more expensive. Some insurers respond by disputing scope, depreciation, and pricing to reduce the amount they have to pay.
3. Increased Litigation Against Insurance Carriers
Policyholders are becoming more aware of their rights and fighting back, causing insurers to adopt stricter internal approval processes that slow things down.
4. Profit Protection by Billion-Dollar Conglomerates
Insurance companies operate for profit—and claim payouts are expenses. Delaying or denying claims helps protect profitability, even at the expense of policyholders.
Common Bad-Faith Tactics Commercial Property Owners Face
Identifying these tactics early helps you respond quickly and protect your rights.
1. Unreasonable Claim Delays
A legitimate commercial claim should be processed within a reasonable time frame—typically within 90 days. Bad-faith delays include:
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Long gaps between communications
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Missed deadlines
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Constant turnover of assigned adjusters
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Repeated inspections
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Claims labeled as “under review” indefinitely
Delays put financial pressure on your business and may be intentional.
2. Lowball Settlement Offers
One of the most common strategies is offering significantly less than the claim is worth. Carriers may hope you:
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Don’t understand your policy
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Don’t have documentation
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Can’t afford to wait
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Will accept any payment to restart operations
Lowballing forces policyholders into an unfair financial position.
3. Misinterpreting or Misrepresenting Policy Language
Some insurers manipulate policy wording to create confusion. Examples include:
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Claiming exclusions apply when they don’t
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Misclassifying storm damage as wear-and-tear
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Using ambiguous language to deny coverage
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Ignoring endorsements that expand coverage
Policy misrepresentation is a serious bad-faith violation.
4. Requesting Excessive or Unnecessary Documentation
Carriers often ask for:
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Duplicate records
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Documents previously submitted
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Endless photos
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Irrelevant financial statements
The goal is not clarification—it is delay.
5. Wrongful Denials Based on False or Unsupported Claims
Examples include:
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Claiming damage is “preexisting” with no evidence
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Stating a loss is not sudden or accidental
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Using unqualified adjusters to justify denial
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Improperly applying exclusions
Wrongful denials are one of the most blatant forms of bad faith.
6. Ignoring Evidence or Conducting Inadequate Investigations
Bad-faith investigations are common and may include:
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Drive-by inspections
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Incomplete damage assessments
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Failure to inspect hidden damage
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Ignoring expert reports provided by the insured
An insurer cannot deny coverage without a thorough, unbiased investigation.
7. Delaying Payment of Undisputed Amounts
Even if part of the claim is in dispute, insurers must pay the portion they agree is owed. Failure to do so is a classic bad-faith tactic.
8. Misuse of Engineers or Third-Party Vendors
Some insurers hire engineers or vendors who consistently minimize or dispute damage to reduce payouts. Their reports may be biased or incomplete.
How Bad-Faith Tactics Harm Commercial Property Owners
Bad-faith claim handling isn’t just frustrating—it can have major financial consequences, including:
1. Disrupting Business Operations
Delays prevent timely repairs, prolong downtime, and reduce revenue.
2. Increasing Repair Costs
As time passes, damage worsens and costs rise.
3. Causing Loss of Tenants
In multi-tenant properties, delayed repairs may drive tenants to terminate leases.
4. Creating Cash-Flow Crisis
Without insurance funds, businesses may struggle to operate or recover.
5. Forcing Owners Into Unfair Settlements
Insurers count on desperation to pressure owners into accepting less than they are owed.
This is why legal representation is often the only effective tool in combating bad-faith practices.
How to Protect Your Business From Bad-Faith Tactics in 2026
Commercial property owners can take clear, strategic steps to safeguard their rights and strengthen their claims.
1. Document Everything From Day One
Keep detailed records of:
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Emails and phone calls
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Inspection notes
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Adjuster names and dates
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Damage photos and videos
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Repair estimates
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Maintenance logs
Good documentation is one of the strongest defenses against bad faith.
2. Set Clear Expectations With Your Carrier
Request:
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A timeline for each stage of the claim
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Written confirmation of all requests and promises
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A clear explanation for any delay
This puts pressure on the insurer to act responsibly.
3. Request Written Explanations for Any Denial or Underpayment
Insurers must provide specific reasons, supported by policy language. Vague or incomplete explanations are a red flag.
4. Obtain Your Own Independent Estimates
Do not rely solely on the insurer’s numbers. Independent contractors, engineers, or public adjusters can help verify the true value of your loss.
5. Never Accept a Low Initial Offer Without Legal Review
Commercial losses are often complex. Even offers that seem reasonable may be far below what you're entitled to.
6. Know the 90-Day Rule
If your claim is older than 90 days and still unpaid, it may be time to take legal action. This is one of the clearest indicators that the insurer is not fulfilling its obligations.
7. Consult a Commercial Insurance Attorney Early
Involving an attorney does not escalate a claim—it protects your rights. At The Voss Law Firm:
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We take cases on a contingency-fee basis
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You pay nothing unless we win your case
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We force insurers to act in good faith
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We negotiate aggressively on your behalf
Commercial property owners should never have to battle billion-dollar insurance corporations alone.
When to Contact The Voss Law Firm
Call us immediately if:
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Your claim is delayed or ignored
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You suspect your insurer is acting in bad faith
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You receive a lowball offer
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The insurer misrepresents policy language
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Your claim is older than 90 days
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Your business is suffering financial loss due to delays
When you call The Voss Law Firm, P.C., you’ll see that we’re here to help you—listening first, learning about your case, answering every question, and guiding you through the next steps.
Final Thoughts
Navigating a commercial insurance claim is challenging enough without facing deceptive or dishonest practices from your insurance carrier. As we move through 2026, commercial property owners must remain vigilant. Bad-faith tactics are becoming more sophisticated, more frequent, and more harmful.
But you are not powerless—and you are not alone.
The Voss Law Firm is dedicated to protecting commercial policyholders, fighting back against unfair treatment, and ensuring that property owners receive the full recovery they are entitled to under their policies. With the right documentation, knowledge, and legal support, you can prevent bad-faith tactics from jeopardizing your business.
