Is there really a $9,000 policy limit for businesses?
I currently have a claim against a mechanic shop for some significant damage done to my car. After two months of little progress with the adjusters—despite having lawyers involved—I’ve finally seen some movement recently.
The demand stated that they would accept the policy limits only if I provided proof of those limits, along with a declaration confirming there was no other insurance coverage.
Last week, the adjuster started communicating with my lawyer, claiming that a settlement had been reached (which it had not) and inquiring about where to send the check—without mentioning an amount. After some back-and-forth, the adjuster claimed the policy limit was only $9,000, stated they would not provide a declaration page or any disclosure, and said the check had already been sent.
I have a couple of concerns:
1) How can they unilaterally decide that the matter is settled and initiate a payment without my agreement?
2) Is it even possible for a business liability or garage keeper’s liability policy to have such a low limit?
For context, I have a business policy for cleaning services, and the lowest coverage I could find was $300,000. How could a business that works on vehicles—which can incur damages well into the hundreds of thousands—possibly have a policy with only a $9,000 limit? Is this even a legitimate policy, or are they trying to mislead me?
It sounds like you’re dealing with a frustrating situation. Here are some points to consider regarding your questions:
1) Unilateral Settlement and Check Issuance: Adjusters typically cannot unilaterally decide that a claim is settled without your explicit agreement. A settlement usually requires acceptance from both parties. If the adjuster is asserting that they sent a check without a signed settlement agreement from your side, it could be worth discussing this with your lawyer. They can clarify the legal implications and may be able to demand proper documentation of any settlement agreement.
2) $9,000 Policy Limit on Business Liability: While it is uncommon, it is not entirely impossible for a business to have a policy limit as low as $9,000, especially if it’s a smaller operation or if they opted for minimal coverage due to cost considerations. However, businesses that deal with vehicles typically need higher coverage limits due to the risks involved. Your experience with cleaning business insurance shows that there is a market for higher limits, which may apply to most service industries involving vehicle work. If you’re concerned they’re misrepresenting their coverage, you might want to explore whether you can find out more about their policy, potentially via your attorney.
If the adjuster isn’t providing satisfactory proof of the policy details, you may have grounds to continue negotiating or to challenge the amount or validity of the payment. It could also be beneficial to investigate if the mechanic shop has any other forms of liability coverage that could come into play. Overall, closely working with your attorney will be key as you navigate through this. They can advocate on your behalf and help ensure that you’re treated fairly.