Understanding Insurance Disputes and Bad Faith Denials in Mississippi
A sudden fire, hurricane, or other disaster can shut down your business in an instant—stopping income, damaging inventory, and straining your ability to pay employees or overhead. Many Mississippi businesses carry business interruption insurance for exactly this reason. But what happens when your insurance company delays, underpays, or outright denies your claim? Worse yet, what if they accuse you of exaggerating losses or failing to properly document them?
As a Mississippi business insurance claim lawyer with decades of experience, I’ve seen firsthand how insurance companies act when claims threaten their bottom line. Business owners who’ve faithfully paid premiums are often shocked to discover how aggressively insurers can work to avoid paying fair compensation after a disaster.
I’m Jonathan Barrett of Barrett Law, PLLC. For decades, my firm has helped Mississippi businesses recover full compensation after devastating losses. We represent clients throughout the state in insurance claims and bad faith litigation—especially when insurers delay or deny rightful business interruption coverage.
If your claim has been delayed, undervalued, or denied, or if your insurer blames you for your business losses, you have legal options. This blog explains what business interruption insurance is, how these claims work in Mississippi, and what you can do if your carrier fails to pay.
What Does Business Interruption Coverage Include?
Business interruption insurance is designed to replace lost income when a business is unable to operate due to a covered disaster. This is not coverage for property damage itself—that falls under your commercial property policy. Instead, it helps businesses stay afloat during downtime.
Here’s what a typical policy may cover:
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Lost business income based on past financial performance
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Ongoing operating expenses such as payroll, rent, and utilities
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Relocation costs if you temporarily move your business
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Extra expenses incurred to minimize shutdown duration
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Profits you would have earned during the affected period
Coverage usually kicks in after a “waiting period” (e.g., 48-72 hours). The duration of coverage is called the “period of restoration,” which lasts until your business can reasonably resume normal operations.
However, filing a successful claim is often anything but simple.
How Mississippi Businesses Can File a Business Interruption Claim
After a fire, hurricane, or other disaster, a business must act quickly and document every detail. Here’s a general overview of the claim process:
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Review your policy to confirm business interruption coverage is included.
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Document the damage and disruption, including photos, repair estimates, financial records, and employee wage documentation.
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Notify your insurer as soon as possible and begin compiling all required records.
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Keep detailed logs of every expense, including costs to operate at reduced capacity.
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Submit a claim that clearly outlines losses, timeframes, and evidence.
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Cooperate with inspections and requests for documentation—but do so carefully and with legal guidance if needed.
If your insurer begins stalling, offering low settlements, or questioning your losses, contact an attorney immediately. Barrett Law, PLLC has successfully represented Mississippi business owners in challenging claim denials, delays, and underpayments.
Common Denial Tactics Used by Insurers
Insurers are known to use several tactics to deny, delay, or reduce business interruption payouts, including:
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Disputing the cause of the shutdown (e.g., blaming uncovered damage instead of the fire)
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Challenging the scope of losses, including future earnings projections
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Alleging failure to mitigate damages by not reopening fast enough
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Questioning documentation or claiming insufficient proof
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Delaying requests for more paperwork in a tactic known as “slow pay”
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Blaming the policyholder for the interruption
When these tactics cross the line into intentional obstruction, it may constitute bad faith insurance conduct under Mississippi law.
What Is Insurance Bad Faith in Mississippi?
Mississippi law imposes a duty on insurers to treat policyholders fairly. When an insurer unreasonably delays payment, denies a valid claim without justification, or fails to conduct a proper investigation, they may be liable for bad faith.
Bad faith is not just a breach of contract—it’s a wrongful act. Victims of bad faith may be entitled to additional compensation beyond their original policy limits, including:
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Punitive damages
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Consequential losses
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Attorney’s fees and litigation costs
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Emotional distress damages in some cases
Examples of bad faith in business interruption claims may include:
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Denying coverage without a legitimate basis
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Ignoring submitted evidence or documentation
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Misrepresenting policy terms
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Failing to investigate the claim in a timely manner
Barrett Law, PLLC has extensive experience filing bad faith lawsuits when insurers violate these obligations.
Who Is Affected and Why It Matters
Business owners across Mississippi, from Gulfport to Tupelo, face tremendous stress when their income stops overnight. Whether you run a restaurant, factory, law office, or retail store, a fire or storm can devastate operations. Without insurance funds flowing quickly, you may struggle to:
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Cover payroll
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Maintain customer relationships
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Pay rent or loans
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Rebuild inventory
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Keep your business afloat
The impact of a denied or delayed business interruption claim is more than financial—it’s personal. You’ve invested years building your business. When your insurer fails to support you during a disaster, it’s time to hold them accountable.
Barrett Law stands ready to protect your interests and pursue the compensation you deserve.
Relevant Mississippi Laws and Legal Rights
Several Mississippi statutes and court precedents protect policyholders. Key laws include:
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Miss. Code Ann. § 83-5-45 – Prohibits unfair insurance trade practices, including delays and misrepresentations.
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Miss. Code Ann. § 11-1-65 – Allows punitive damages in cases of gross negligence or willful misconduct.
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Mississippi Supreme Court case law – Recognizes the duty of good faith and fair dealing inherent in every insurance contract.
Federal laws such as the Unfair Claims Settlement Practices Act and standards set by the National Association of Insurance Commissioners (NAIC) may also help support your claim.
When these standards are violated, businesses can—and should—file lawsuits to recover both contract and bad faith damages.
Practical Advice for Mississippi Business Owners
If your business has suffered an interruption and you have coverage, take these steps:
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Act quickly – Report your claim immediately.
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Hire an experienced attorney – Don’t wait until after your claim is denied.
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Preserve financial records – Maintain records of revenue, expenses, tax filings, payroll, and vendor contracts.
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Document everything – Keep logs of every conversation and request with the insurer.
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Be cautious during inspections – Don’t speculate about causes or losses. Stick to facts.
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Don’t accept lowball offers – Insurers may offer far less than you’re owed hoping you’ll settle quickly.
Barrett Law, PLLC helps clients document their losses, challenge unfair denials, and pursue litigation when necessary.
Frequently Asked Questions (FAQs)
What is the difference between property insurance and business interruption insurance?
Property insurance covers physical damage to your building or inventory. Business interruption insurance covers income you lose during the time your operations are shut down. Both are often part of a commercial package policy.
How do I prove lost income after a disaster?
You’ll need tax returns, profit and loss statements, and other financial documents to show what you were making before the disruption and what you’ve lost. An experienced attorney can help organize this in a way that strengthens your claim.
Can I get coverage if I moved operations to another location?
Yes. Many policies include coverage for “extra expense,” which may include the cost of relocating operations to another space so you can continue generating income.
What if the insurance company says I didn’t mitigate my losses fast enough?
Insurers often make this argument to avoid paying the full value of your claim. If you took reasonable steps to protect your business under the circumstances, you can still be entitled to compensation.
What happens if the insurer takes too long to respond or pay?
Unreasonable delays can be grounds for a bad faith lawsuit under Mississippi law. If your insurer is stalling, contact Barrett Law immediately.
Is looting or theft during closure covered by business interruption insurance?
Some policies may cover related crime losses, but not all. You’ll need to review your policy terms or have an attorney assess it.
Can I file a lawsuit even if my claim hasn’t been officially denied yet?
Yes. If your insurer is delaying or acting in bad faith—even before a formal denial—you may have grounds to act.
How long do I have to file a lawsuit in Mississippi for bad faith insurance practices?
Generally, the statute of limitations is three years from the date the bad faith occurred, but don’t delay. Every case is different, and early action improves your position.
What if I think my insurer misrepresented the policy coverage when I bought it?
That may also be a form of bad faith or misrepresentation. You may be able to pursue additional damages if the insurer misled you.
Can my business recover attorney’s fees in a bad faith lawsuit?
Yes. If your insurer acted in bad faith, Mississippi law may allow recovery of legal fees and costs in addition to your original losses.
Have You or Your Business Suffered Business Interruption Losses and Damages in Mississippi?
Call Mississippi Business Interruption Insurance Claim Attorney Jonathan Barrett 24/7/365 at (601) 790-1505 for Your FREE Consultation
At Barrett Law, PLLC, we fight for Mississippi businesses and property owners when insurers refuse to honor their contracts. Whether your fire loss was denied, delayed, or undervalued, we are ready to hold your insurance company accountable.
Our firm handles insurance litigation cases throughout the State of Mississippi—including Jackson, Gulfport, Southaven, Hattiesburg, Biloxi, Olive Branch, Tupelo, Meridian, Pearl, Madison, Greenville, Oxford, Clinton, Horn Lake, and Brandon. We will review your claim, your policy, and your rights at no cost to you.
Jonathan Barrett Fights for Mississippians – Call 24/7/365 at (601) 790-1505 to Receive Your FREE Consultation
Whether your insurance company is blaming you, stalling your payout, or denying your fire or business interruption claim altogether, don’t face it alone. Barrett Law is here to stand up for your rights and help you recover everything you are owed.
