Insurance Agent Duties

Insurance agents may be surprised by a recent Ohio court ruling regarding the legal duties of an insurance agent to an insured.  The decision and its implications are discussed in an American Agent & Broker article by Barry Zalma, a highly experienced consultant and attorney specializing in insurance.

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The article (see here) describes a couple who claimed that they relied on their agent for the proper amount of insurance.  The court decision stated that an insurance agent or broker is not ordinarily a fiduciary of the insured, but also indicated that the relationship might be altered by practice.  Documentation of the relationship between the insured and agent is critical in determining whether an extraordinary relationship exists.

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Comments

[Garfield and Bland]

Yeah, i have come across the report previously and it is very interesting.

I think this goes for for UK law too.

[Baldwingj]

i am gonna show this to my friend, man

[Insurance broke]

I think it woud be a good thing if the agent can have a more pivotal role in claims. Generally if a person has to deal with a claimant you will get a fairer payout.

[Julieana Smith]

Dear Blogger,
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[Wm E Morrell Inc]

Agents need to document when a client turns down coverage although it was recommended for them to consider. Most agents are providing themselves with E & O coverage for protection for these situations.

[Dan]

This is amazing, it just shows that every conversation has to be documented. I have always been afraid of people claiming something other than what was really discussed ( when it comes to face values ) during a first meeting, this is why I try to keep a ledger of changes and discussions of every client along with their file.

Dan