Property & Casualty Insurance Procurement & Litigation (3 of 10 Reoccurring Themes Every Lawyer Should Know)
An insurance contract must be understood by the buyer.
There needs to be a clear understanding of the coverage purchased. Agents, brokers and underwriters are often cautioned not to answer questions about coverages in writing by their superiors and their professional (Errors & Omissions) liability insurance companies.
The fear is that the agent will somehow, inadvertently, change the meaning of the insurance policy and/or later be accused of practicing law without a license. There is nothing improper when a purveyor of insurance states their understanding of how a policy would be interpreted in a claims scenario; in fact, it is completely proper and demonstrates a greater degree of care.
In addition, the customer will (hopefully) learn that they have purchased what they thought they have purchased. Agents, brokers and underwriters sell thousands of contracts of insurance everyday. Are they really not supposed to know how they would be interpreted in a claims situation? If the agent or broker will not do it, then ask the underwriter to explain. Refusal to do so should arouse suspicion and other agents or brokers need to be contacted.
Lesson #3: Your client (the insurance buyer) can and should ask questions in writing and get answers in writing.
ABOUT THE AUTHOR: David L. Stegall, Principal Consultant, Risk Consulting & Expert Services
David Stegall is the Principal Consultant at Risk Consulting & Expert. Mr. Stegall holds a B.A. in Communication from Auburn University and is a Chartered Property and Casualty Underwriter, an Associate in Risk Management and an Associate in Reinsurance, all awarded by The Institutes in Malvern, PA. He is also a Director of the Society of Risk Management Consultants.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.For specific technical or legal advice on the information provided and related topics, please contact the author.
