Insurance Agents Required to Communicate

Insurance agents and brokers need to communicate effectively with their clients in order to avoid professional liability (E&O) claims.  Another article in American Agent & Broker (see here) refers to a case in South Dakota which turned on this point.  In this case, an important question of fact was whether the agent had communicated to the client that the requested coverage was not provided.

Most insurance agent and broker professionals know that documentation is critical in avoiding insurance agent and broker professional liability insurance claims.  This case goes a bit further in noting a widespread requirement for an affirmative communication from the agent to the client that certain coverage has not been placed.

The court noted that numerous cases have determined that if an insurance agent is unable to procure insurance coverage according to a client's instructions, the agent has a duty to notify the client of his or her failure to do so. Whether the agent in the case at hand breached this duty, the court said, was a question of fact for a jury to consider.

Comments

[Toronto life insurance broker]

Interesting article. I am dealing Life Insurance Canada by a well-known broker, so I know something about it. What the court has noted is absolutely true, but I suppose everybody expects that from us. Communication is essential in this business!

[Dan]

I agree with the court's decision with having to communicate with the client. I own a life insurance brokerage in Fort Myers and I cannot stress enough to my agents that communication about the clauses and riders of a policy can make or break the deal.

Especially when you are dealing with the policy holder's family after their passing, if they see a discrepancy they will sue without hesitation.

Dan

[Fred]

Good article. Here is another excellent article on buying insuance that can help agents.

http://www.bizcovering.com/Investing/Five-Things-You-Must-Consider-Before-Buying-Insurance.116123

[Insurance Advice Free Quotes]

As an agent, they must learn how to communicate effectively with client. A training course would be good for them, this is to be sure they could do their clients instructions and wont have any problem in the future.