Insurance Broker and Agent Malpractice Lawyer
The insurance market is complex. Insurance companies offer thousands of coverage and pricing combinations. This makes the market extremely risky for businesses (and individuals) seeking to obtain adequate insurance coverage. The standard business general liability policy has numerous exclusions. These include many of the greatest exposures including environmental, product, transportation, employment and intellectual property coverage areas. The diversity of exclusions is creating a market for products targeted toward specific harms or more general policies relying on nuanced and specially written provisions.
This means businesses and individuals are increasingly relying on the advice and expertise of brokers and agents. Brokers and agents are addressing their customer’s insurance needs and providing professional services to their policyholder clients. They are identifying types of risk that a company may face, pointing out gaps in coverage and finding ways to minimize risk. Some are even functioning as their insureds’ claims managers. When this advice is negligent and leads an insured to purchase the wrong or inadequate coverage, the broker or agent may be liable for coverage shortfalls.
Insurance Agent and Broker Duties
Insurance brokers and agents have duties to the insured. Under California law, at the most basic level they have a duty to properly represent the type of insurance coverage being sold and they have to help their customer timely procure the agreed-upon coverage. If they hold themselves out as “experts” in a particular category of insurance, they may increase their duties. Regardless, they are liable for negligently performing their duties and must at a minimum use reasonable care, diligence, and judgment in procuring the insurance requested by an insured.
California courts have held that a broker or agent may be liable if they (a) misrepresent the nature, extent or scope of the coverage being offered or provided, (b) there is a request or inquiry by the insured for a particular type or extent of coverage that is not procured or (c) they assume additional duties by either express agreement or by holding themselves out as having expertise in a given field of insurance being sought by the insured.
Common Areas of Insurance Agent Malpractice and Broker Error/Malpractice
Insurance agents and brokers can make errors leading to malpractice in many areas. Some of the more common errors include:
- Inadequately explain the terms of a policy or tell a policyholder they have certain coverage when they do not
- Intentionally select a policy that benefits the insurance company and not the policyholder
- Sell inadequate or inappropriate coverage
- Fail to use knowledge of policyholder’s changes circumstances to inform policyholder of insurance issues and coverage gaps
- Submit inaccurate information on insurance forms and applications
- Fail to complete the insurance contract by not sending the signed documents to the company
- Not adequately explain or leaves out coverage details
How A Lawyer Can Help With Insurance Broker or Agent Negligence
If your insurance agent or broker breaches their duty of care to you and you are denied coverage, have your coverage cancelled or obtain the wrong coverage and suffer a loss because of this breach, you may be able to sue and recover damages.
The Law Offices of Scott Glovsky represents Los Angeles and Pasadena clients who were financially harmed by the negligence or misrepresentation of their insurance agents or brokers. If you have suffered damages because of insurance agent or broker negligence or incompetence, please contact us by phone at 877-316-2093, complete the form below or send us an inquiry form by clicking here. We offer a free consultation.