When a Mississippi business suffers a major loss—whether from fire, storm, vandalism, or another insured event—insurance coverage is often the only thing standing between survival and closure. Business owners trust that after paying their premiums, their insurer will honor the policy in full and in good faith. Unfortunately, this trust is often misplaced. Insurance companies sometimes delay, underpay, or outright deny legitimate claims using unfair tactics. That’s where Mississippi’s recognition of the common law doctrine of bad faith comes into play.
I’m Jonathan Barrett, an experienced Mississippi business insurance claim lawyer and founder of Barrett Law, PLLC. For decades, I’ve helped businesses across the state hold insurance companies accountable when they act unfairly or in bad faith. If your insurance provider has acted dishonestly or unreasonably, you may not just be entitled to what your policy owed—you may also be entitled to punitive damages under Mississippi common law.
This article explains how bad faith applies to business insurance claims, the signs of bad faith conduct, and what legal protections you have. If your claim has been wrongfully denied, delayed, or undervalued, Barrett Law, PLLC is here to help you recover what you’re truly owed.
What Is Bad Faith in a Mississippi Insurance Claim?
Bad faith occurs when an insurance company acts dishonestly or unfairly in handling a claim. This goes beyond simple mistakes or disagreements—it involves intentional or reckless conduct that places the insurer’s financial interests above the policyholder’s rights. In Mississippi, courts have long recognized that insurers owe their insureds a duty of good faith and fair dealing, even if it’s not explicitly stated in the insurance policy.
Under common law, this duty arises from the implied covenant that exists in every contract. When an insurer violates this duty—such as by intentionally misrepresenting facts, delaying payment without justification, or failing to properly investigate a claim—it may be sued for bad faith.
Importantly, Mississippi allows punitive damages to be awarded in bad faith cases. These damages are not tied to the actual loss but are designed to punish the insurer and deter similar conduct in the future. This is especially significant in business insurance cases, where delays in claims handling can cause ripple effects like payroll shortfalls, customer cancellations, or even bankruptcy.
Signs of Bad Faith by Insurance Companies
Insurers may use a variety of tactics to frustrate or deny valid business insurance claims. While not every delay or dispute constitutes bad faith, certain patterns are red flags. Common indicators include:
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Unjustified delays in payment without explanation
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Lowball settlement offers far below documented losses
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Ignoring evidence you’ve submitted in support of your claim
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Requesting the same documents multiple times to stall the process
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Failing to investigate the claim promptly or thoroughly
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Denying the claim without a reasonable basis
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Blaming you for the loss without proof
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Misrepresenting policy language to avoid payment
For example, if your warehouse burned down and your insurer refuses to pay because they claim you didn’t install enough fire extinguishers—despite having passed recent inspections and meeting all code requirements—that could be a sign of bad faith.
Who Is Affected and Why It Matters
Bad faith insurance practices affect businesses of every size—from family-owned restaurants and retail stores to manufacturing facilities, commercial landlords, and corporations. A single act of insurer misconduct can cause long-term consequences such as:
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Loss of income due to business interruption
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Damage to your reputation from unfulfilled contracts
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Loss of property and assets without proper compensation
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Layoffs or workforce reduction due to cash flow disruptions
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Loan defaults and penalties from delayed claim payouts
The team at Barrett Law, PLLC works closely with Mississippi business owners who have been left in limbo by their insurance carriers. We don’t just focus on recovering what the insurance company owes—we also pursue bad faith claims when appropriate, to secure additional compensation and hold wrongdoers accountable.
Legal Obligations Under Mississippi Law
Mississippi recognizes bad faith under both common law and specific statutes. The common law bad faith doctrine arises from contract principles and is enforced through Mississippi courts.
Key points include:
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Universal Life Ins. Co. v. Veasley, 610 So. 2d 999 (Miss. 1992): This case laid a strong foundation for policyholders to seek both compensatory and punitive damages where the insurer lacked an “arguable basis” for denying the claim.
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Miss. Code Ann. § 83-5-33: While this statute addresses unfair claims practices by insurers and is enforced by the Mississippi Insurance Department, it also lays groundwork for civil liability.
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Jury instructions in bad faith cases often require the insured to show:
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A valid claim was made under the policy;
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The insurer lacked a legitimate or arguable reason for denial;
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The denial or handling was malicious, reckless, or grossly negligent.
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Mississippi law gives policyholders real tools to push back against bad faith conduct. The threat of punitive damagesgives insurers a strong incentive to handle claims properly. However, many insurance companies gamble that the business owner won’t fight back. That’s where Barrett Law comes in.
How to Respond to Bad Faith: Practical Advice for Mississippi Businesses
If you suspect your insurer is acting in bad faith, take these steps immediately:
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Document everything – Keep a timeline of communications, copies of all emails, letters, and claim documents.
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Submit your proof of loss and all required documentation promptly. Do not give the insurer an excuse to delay.
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Request a written explanation for any delays or denials.
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Avoid giving recorded statements without legal counsel.
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Do not accept a lowball offer without reviewing it with an attorney.
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Contact a business insurance claim lawyer like Jonathan Barrett if the claim remains unresolved or appears mishandled.
By taking these early steps, you strengthen your legal position and protect your business from further harm.
FAQs About Mississippi Bad Faith Insurance Claims
What is the difference between a regular denial and a bad faith denial?
A regular denial may result from a legitimate disagreement over coverage or damages. A bad faith denial involves dishonesty, manipulation, or a complete lack of justification. It includes actions like lying about policy terms or intentionally delaying payment.
Can my business recover more than the value of the insurance policy?
Yes. If the insurer acted in bad faith, you may be eligible for punitive damages in addition to the amount owed under the policy. These damages are awarded to punish the insurer’s misconduct and deter similar behavior.
What are punitive damages, and when are they available?
Punitive damages are extra damages awarded when an insurer’s conduct is particularly egregious. Mississippi courts allow them in bad faith cases when the insurer acts with malice or reckless disregard for the policyholder’s rights.
How do I prove that my insurer acted in bad faith?
You must show the claim was valid, the insurer had no legitimate basis to deny or delay it, and their conduct was willful or grossly negligent. Evidence may include emails, internal claims notes, and contradictory reasons for denial.
Can a delay in payment be considered bad faith?
Yes, if the delay is unreasonable and not justified by a legitimate investigation. Insurers are expected to pay or deny claims in a timely manner. Unjustified stalling tactics can support a bad faith claim.
What if my insurer offers less than the amount my contractor quoted?
A lowball offer may be a sign of bad faith if it’s unreasonably below your documented losses. An attorney can have independent experts evaluate your damages to strengthen your case.
Does my insurance company have to explain why they denied my claim?
Yes. Insurers are required to provide a written explanation for claim denials. Failure to do so is a red flag and may support a bad faith claim.
Can I file a bad faith lawsuit even if I received partial payment?
Yes. If your insurer knowingly underpaid your claim or withheld payment without justification, you may still have grounds for a bad faith action.
Is bad faith recognized in commercial and business policies, not just homeowners?
Absolutely. Mississippi’s bad faith doctrine applies to all types of insurance, including business property, business interruption, and commercial fire policies.
What should I do if my claim is being mishandled?
Document all interactions, ask for written reasons for any issues, and contact a Mississippi insurance claim lawyer. The earlier you act, the better your chances of protecting your rights and preserving evidence.
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
When insurance companies act in bad faith, the consequences can be devastating to Mississippi businesses. Whether you’re dealing with unexplained delays, a wrongful denial, or an offer that doesn’t reflect your real losses, you don’t have to accept it. At Barrett Law, PLLC, we’ve spent decades holding insurers accountable for failing to live up to their promises.
Jonathan Barrett Fights for Mississippians – Call 24/7/365 at (601) 790-1505 to Receive Your FREE Consultation
Barrett Law, PLLC represents businesses throughout the entire State of Mississippi, including the Mississippi Gulf Coast, Central, Southern, and Northern Mississippi. We proudly serve clients in Jackson, Gulfport, Southaven, Hattiesburg, Biloxi, Olive Branch, Tupelo, Meridian, Pearl, Madison, Greenville, Oxford, Clinton, Horn Lake, Brandon, and beyond.
If your business has suffered property loss, business interruption, or insurer mistreatment, don’t wait. Call now for a no-obligation case review.
