Holding Insurance Brokers Responsible For Professional Negligence

Holding Insurance Brokers Responsible For Professional Negligence

Holding Insurance Brokers Responsible For Professional Negligence

Holding Insurance Brokers Responsible For Professional Negligence

I’m Ed Smith, a Vacaville Personal Injury Attorney. Insurers play an important and often vital role in the lives of most people. Despite this, agents and brokers can only be held liable for negligently performing their professional duties in a few circumstances. Victims must establish all the basic elements of negligence, but in these types of cases, proving that the insurer owed a duty of care to the plaintiff can be especially difficult, so if you were the victim of your insurer’s negligence, it is vital to obtain the advice of an experienced personal injury attorney who can protect your interests.

Duty of Care

One important aspect of determining the type of duty owed to an insurer’s client is to determine whether he or she is an agent or a broker. Insurance agents are assumed to be acting for the carrier that they represent. As a result, agents’ actions are considered binding. Brokers, on the other hand, work with multiple insurance carriers and so are seen as primarily working for the insured. Thus, the actions of a broker do not bind the carrier. For this reason, brokers are far more likely to be named as defendants in cases of professional negligence than are agents.

Broker Negligence Scenarios

There are four main situations in which a plaintiff may be able to hold a broker responsible for professional negligence, including when:

  • The client claims to have transferred funds to the broker in order to pay a premium, but the broker failed to do so;
  • The client requested a specific insurance policy, but the broker failed to provide it;
  • The broker held him or herself out as being an expert in a certain type of insurance, but failed to obtain the necessary and available policies; and
  • The broker provided homeowner’s insurance for the client, but failed to provide sufficient coverage for the client’s home.

In these scenarios, lawsuits will hinge on whether the broker’s duty of care can be established.

Limited Duties

Insurance brokers only have a duty to exercise reasonable care in providing a client’s requested coverage and generally do not owe their clients a fiduciary duty. Most courts interpret this duty narrowly, although in some cases, additional duties will be imposed on the broker when:

  • The broker misrepresented the nature, extent, or scope of coverage;
  • The broker expressly agreed to assume additional duties; and
  • The broker and the insured have a long-term relationship.

Expert Opinion

The success of cases based on professional negligence depend largely on expert opinion. This makes it extremely important for legal teams to obtain the advice of an experienced broker before going to trial. He or she will be able to establish whether the coverage that the client wanted was available elsewhere in the marketplace. If it was not, then a broker cannot be held liable for negligence. It is also necessary to compile all documents that contain information about the insurer-client relationship.

Establishing An Insurance Broker’s Duty

I’m Ed Smith, a Vacaville Personal Injury Attorney. Establishing an insurance broker’s duty to his or her clients is one of the most important aspects of a case based on professional negligence. This can be a difficult element to prove, so if you are a resident of the Sacramento, El Dorado, Placer, San Joaquin, Solano, Yolo, or Yuba County areas and are the victim of professional negligence, please give me a call at (916) 921-6400 or (800) 404-5400 for free, friendly advice.

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