Property & Casualty Insurance Procurement & Litigation (5 of 10 Reoccurring Themes Every Lawyer Should Know)
Agent's have a duty to their client.
An agent, more often than not, has a duty to advise (his clients). In the 2007 study “Insurance Agents’ Duty To Advise”, The Hassett Law Firm, P.L.C., of Phoenix, AZ, dealt with this question in an article by the same name.
Two-thirds of the states’ case law indicates that, yes, agents do have a duty to advise their clients, at least on a case-by-case basis. This duty may be difficult to establish in 13 states, and agents are considered simply “order takers” in five states (AL, MT, RI, UT, WV).
Attorneys need to check their specific state statutes and case law on this issue. As regards the precise scope of this duty, variances do exist between each state.
Lesson #5: Agents (in most cases) have a duty to do more than to just place coverage and have a responsibility to use their special knowledge to the benefit of their clients.
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.
