You should want to adjust the shadowAtten and shadowfiltersize slider settings Mr.Elias mentioned and see if those make any difference. The shadow would work even with sh*tty GPU by default. So, about the shadow issue, this is pretty new to me.
The DXLevel 12 or more doesn't matter because of that iGPU too weak to support that API. Sorry but the iGPU like Intel UHD graphic chip such as that is incompatible with SFM and won't give you a decent graphics quality and performance. I that the GPU? Sorry I didn't respond earlier Thank you, you actually respond. He's not going to tell us because he knows his PC is not good enough to run SFM well and expect a 'miracle' solution in here. OP asked the same issue at the Newbie's Guide thread he refuses to tell what his GPU or at least the brand of his GPU so I could help him with possible GPU driver issue instead continue whining why SFM keep showing that error and unable show the shadow properly.
Originally posted by EmperorFaiz.png:Don't bother.