Page 24 - November 16-December 6, 2022 Law & Accounting Assurance, tax, and consulting offered through Moss Adams LLP. Investment advisory services offered through Moss Adams Wealth Advisors LLC. Investment banking offered through Moss Adams Capital LLC. Here, the sun rises on fresh ideas and boundless potential. With an abundant spirit of optimism, openness, and enterprise—we help clients in the real estate industry grow, manage, and protect their prosperity. RISE WITH THE WEST. M O S S A DA M S .C O M / R E A L E S TAT E I N S I G H T R I S E S I N T H E W E S T Syndications Entity Formation Leasing Construction Financing Land Use Water Law Foreclosure Litigation Dispute Resolution Oil and Gas Contact: Jonathan Goodman or Karen Radakovich | | 4750 Table Mesa Drive, Boulder, CO 80305 | (303) 494-3000 A s a business owner, executive or risk man- ager, you know it is a prudent business decision to purchase commercial insurance cover- age for your business – wheth- er its commercial general liability, commercial property, builder’s risk, directors and officers liability, employment practices liability, or any of the variety of commercial insur- ance products available to businesses. It’s a good way to hedge against the many risks your company faces. But what do you do when your insurance carrier denies your claim? Let’s say you have made the responsible decision to pur- chase insurance coverage for your business and your busi- ness suffers what you think is a covered loss. You file a claim with your insurance car- rier, reasonably expecting the carrier to step up and cover the claim. Instead, the carrier tells you it needs to investigate whether your insurance policy covers the claim, or whether coverage is excluded by one of the many e x c l u s i o n s buried in the policy. The carrier drags its feet inves- tigating the claim, sends n u m e r o u s requests for information, ignores your calls and emails, and bounces you back and forth between various claim adjusters before denying the claim. Or maybe the car- rier ignores evidence of cover- age and denies the claim after a barebones investigation. At this point, many busi- nesses give up and let the car- rier off the hook. However, Colorado business owners should be aware of two statu- tory provisions unique to Col- orado that provide a powerful tool for policyholders to fight for insurance coverage. In 2008, the Colorado Gen- eral Assembly enacted two statutes, C.R.S. § 10-3-1115 and § 10-3-1116, that address this exact situation. The statutes create new legal claims a poli- cyholder can bring against its insurance carrier. Specifically, an insurance carrier may not “unreasonably delay or deny payment of a claim for ben- efits owed to or on behalf of any” insurance policyholder. This applies to any type of insurance coverage with a few exceptions (life insurance, title insurance, and workers’ com- pensation insurance). Howev- er, the most important aspect of the statutes are the rem- edies they provide. The statutes state that an insurance carrier that unrea- sonably delays or denies an insurance claim is liable to its policyholder for two times the covered benefit in addition to the policyholder’s attorney’s fees incurred in litigation. Importantly, this remedy is in addition to the amount of the insurance claim. For example, your busi- ness may have a commercial general liability policy with $1 million in coverage limits. Your business suffers a loss that is $1 million or more and makes a claim on the policy. The insurance carrier delays its investigation of the claim or denies the claim without a reasonable basis. Your busi- ness can now bring a law- suit against the carrier for two times the $1 million policy limits, plus the $1 milloin loss, plus attorney’s fees – turning your business’s $1 million loss into a legal claim for $3 mil- lion plus attorney’s fees. Although businesses don’t typically seek out litigation, these statutes give policyhold- ers the leverage they need to demand coverage from their insurance carriers after the carrier wrongfully delays its investigation or denies a claim for coverage. Filing a lawsuit against your carrier for viola- tions of these statues is the best way to convince the carrier to reevaluate its denial and cover your loss. Colorado business owners would do well to keep the statutes in mind next time their insurance carriers deny a claim. s Leverage: Insurance statutes that benefit the policyholder Andrew T. Flynn Partner, Moye White LLP Filing a lawsuit against your carrier for violations of these statues is the best way to convince the carrier to reevaluate its denial and cover your loss.