Insurance agents have a duty — both legally and morally — to provide you the insurance policies that cover the things and people that you hold dear while still fitting within your financial means. Even more, insurance agents have a legal obligation to provide coverage that covers the things that you expected it would, based on the policy acquisition process.
In short, if you bought a certain policy because an insurance agent led you to believe that the policy would cover something — but when needed, the policy was inadequate or did not actually cover those things, then you have legal standing to take action against the negligent agent. Litigation around insurance claims can often be confusing or intimidating since insurance companies have so much power and money at their disposal.
Some law firms, such as Grisham & Kendall, PLLC, like to fight for the underdog against those big groups. However, if you are just curious about the topic or exploring the idea of taking against a negligent agent, I have done some research and explain some of the most common topics associated with this important issue:
What is negligence?
Proving negligence is a beast in of itself that I will discuss, but before that, we must have a common understanding of what entails negligence for an insurance company agent as it relates to the inadequacy or dissatisfaction with your insurance policy. Negligence, in this case, would relate to the insurance agent purposely, or with an overt amount of carelessness, providing you with an insurance policy different than the one you discussed in the policy purchase/sign-up process. Misrepresenting the nature, price, or coverage of your insurance policy also counts as negligence.
Another instance of a potentially-criminal action that an insurance agent could commit that would leave room for negligence claims/litigation is if your insurance agent fails to transfer your premium payments to the insurer (for example, if the agent keeps your premium payments for themselves…), and your coverage lapses or is in some way affected.
Most professional companies have some sort of Errors and Omissions insurance policy in which if an employee is held liable for negligence or errors in the practice of their trade, the company will be able to pay back the damages and harms experienced by customers or vendors by their employees’ malpractice.
This Errors and Omissions insurance policy held by the insurance company will likely be the source of your settlement. But before you get to the payment stage of the litigation around a negligent insurance agent, you have to provide proof of not only the harms experienced by the negligence but also the existence of the negligence itself.
Working with an experienced lawyer, you must be able to prove that you indicated interest in a specific policy aspect or coverage area that was then misrepresented to you by the agent. Sometimes this can be difficult. The worst-case scenario is a disputed liability situation or “he said, she said.” The best-case scenario is one in which there is a physical record of the mistake or negligence. So don’t go deleting meeting notes or emails exchanged with your agent!