This scenario is playing out more and more in personal injury cases: The defense lawyer stands in front of the judge and says, “Judge, candidly, the plaintiff’s demand is reasonable, but we can’t get authorization to pay it.”

Certain insurance companies are denying and delaying compensation to our clients in order to boost their profits. Sour grapes? The ranting of a plaintiff attorney perhaps? It’s not just plaintiff’s lawyers who think so. Major corporate defendants have been forced to go to court against their own insurance companies because those carriers are denying claims, increasing legal fees and getting those defendants fined. In some cases, their refusal to settle has even left the defendants on the hook for punitive damages. Since insurance policies usually don’t cover punitive damages, the defendants very often are liable for these on their own.

In many cases, when taking their insurance companies to court, the defendants are winning. In fact, a Massachusetts court ruled in 2009 that an insurance company had committed a “willful or knowing act,” in this regard and that the act was “unfair or deceptive.” The Massachusetts court went on to award double damages to Celanese. Massachusetts is not the only place. Courts and arbitrators in a number of states have ruled that these tactics are in “bad faith or intentional.”

Why? What’s the reason to delay or deny valid claims? It is what it has always been: Money, with a capital “m.” Insurance company adjusters have testified that claims are being denied not because of the merits of a case but because of the financial aims of insurance companies.

Those aims are to maintain “the float” as long as they can. Float is the mechanism by which an insurance company takes premium payments from policyholders and invests that money while at the same time denying claims, employing delaying tactics and stringing out litigation so that the invested funds can make the insurance company money for the longest amount of time as possible. Some insurance companies have recently carried “float” approaching $77 billion. Assuming a rate of return of even 5 percent on that float can mean profits of $3.85 billion annually.

The solution is not simple. Numbers such as $77 billion assure that. But litigators need to be diligent in attempting to force insurance carrier representatives with full authority to mediation via court order and, when they show up with no or very little authority, attempt to get the court involved. Lawyers also should document what they believe to be bad faith settlement negotiations.

Defendants with real punitive damages exposures have to be extremely vigilant in preserving their bad faith claims and then prosecuting them. On the plaintiff’s side of things it’s much tougher. Unfortunately, the answer is being more ready than ever to try a case to verdict. That solution means a slower and more crowded courthouse for all, even when liability is evident.

One thing that is clear is that with the amount of money at stake, some insurers and those that control them as part of a much larger portfolio, are willing to risk large verdicts in exchange for maximizing profits. While there is no doubt that the insurance industry is a business, policies such as these, while perhaps ultimately good for the bottom line of the shareholder, place insureds, victims and their lawyers in very uncomfortable, and often surprisingly aligned positions.