Restaurant Fire and the 90-Day Business Income Stall
A Reno restaurant suffers a kitchen fire on August 1. The policy has business income and extra expense coverage, a $25,000 deductible, and a two-year suit limitation. The public adjuster submits a sworn proof of loss for $340,000 on September 15, including six months of projected income. The insurer acknowledges the claim but sends document requests on September 20, October 10, and November 5; each request repeats the same three years of tax returns, payroll registers, and vendor invoices already produced. On November 20-more than 90 days after the proof of loss-the insurer has neither accepted nor denied coverage and has not paid undisputed amounts. The adjuster wants to demand appraisal and file a complaint. The insured fears losing the claim because the policy says "no suit unless all policy terms are complied with."
1. Evaluate the insurer's handling under Nevada unfair claims practices.
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The insurer's conduct is problematic. Nevada's unfair claims practices statute, NRS 686A.310, requires prompt investigation and a reasonable affirmance or denial of coverage after proof of loss; repeated duplicative requests for records already produced can be an unreasonable delay. The insurer also should pay undisputed amounts promptly. The adjuster should send a written timeline, identify the three identical requests, demand a coverage position within a stated time, and request payment of undisputed business income. The adjuster should document every request and response. If the insurer continues to stall, a complaint to the Nevada Division of Insurance is appropriate, but it does not replace the adjuster's own written demands.
2. Can the adjuster invoke appraisal, and how should the suit limitation be handled?
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Appraisal is available for the amount of loss if coverage is accepted; it does not decide coverage. The adjuster should invoke appraisal in writing if the policy allows it, while also demanding a coverage position. The two-year suit limitation is a real deadline. The adjuster should not assume the insurer's delay automatically tolls it. Send written demands, preserve all correspondence, and consider consulting coverage counsel well before the deadline. The policy's "no suit unless all policy terms are complied with" clause also means the proof of loss and appraisal demands should be documented. Filing a Division complaint and invoking appraisal are useful pressure points but are not substitutes for protecting the limitation period.
3. What should the adjuster do in the next 10 days?
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The adjuster should send a single comprehensive letter that summarizes the proof of loss, lists the documents already produced, objects to the duplicative requests, demands a written coverage decision within 10 days, and requests payment of undisputed amounts. The letter should also invoke appraisal if coverage is not disputed and state that the insured reserves all rights. The adjuster should prepare a damages binder with tax returns, payroll, vendor invoices, and a business-income calculation. The adjuster should calendar the suit limitation date and recommend that the insured consult counsel if no position is received. A concise chronology of the insurer's requests and responses will support any regulatory complaint.