The company has a duty to defend its policyholder against claims made against them. If you, as a policyholder, are found liable for the losses that another party suffered, then your insurance company must pay for those losses. Bad faith practices occur when companies fail to uphold the standard expected of them. When they fail to protect their policyholders, they may face a case involving insurance bad faith. An insurance company is expected to investigate the claims of their clients in a timely manner, as well as provide policy benefits for those claims. An insurance company must settle all insurance and disability claims according to the policy of the insured. This also includes adhering to policy limits. If any problems arise with medical providers, insurance benefits, or other aspects, the company is required to notify the insured in a reasonable amount of time.