Can a business make a deduction from a customer’s insurance settlement?

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Can a business make a deduction from a customer’s insurance settlement?

We are a restoration company that had a fire. In that fire we lost customers’ contents which our insurance will cover. When the insurer pays for the contents, they make a check payable to our company and we then pay the customers. That being the case, is a customer owes our company money for work that we did for them but they refuse to sign their insurance proceeds over to us, can we legally keep the money that our insurance paid for their loss in our fire?

Asked on August 22, 2013 under Business Law, Indiana

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The short answer to your question is that you legally cannot debit from a customer's insurance claim that you are paid to give to the customer an amount of money that the customer owes you. You will have to file suit against the sutomer for such amount owed if the customer will not voluntarily pay you what is owed.


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