AGENT DUTIES… A CASE IN POINT

From time to time I continue to get inquiries as to the type of insurance cases with which I get involved.   As explained many times, I consider the circumstances of each individual case and give an unbiased opinion as to my evaluation of the matter… sometimes to the pleasure of the contacting attorney… and sometimes not.

Having now been involved in over one hundred fifty (150) cases here is an example of a case in which I acted as expert witness.  In this summary, and it is greatly summarized,  all names have been changed to protect the innocent… and the guilty!

Let’s call the case “Mr. Professional”.  There was a “self-proclaimed” insured, who felt he had coverage as soon as his agent, Mr. Professional, sent his application to an E&S insurance carrier. This account historically had been in the Excess and Surplus Lines market, as a hard to place risk.  Significantly, the agent gave no indication that coverage was bound, explaining that the application had to be sent to see if a carrier would accept.

The applicant, who had a past of questionable legal activities and at least one fire of suspicious origin, assumed coverage was automatically in place.  Prior coverage had been properly (in my opinion) non-renewed by the company that previously wrote the insurance.  The agent had volunteered to look elsewhere for possible coverage.

Within a few hours after the would-be insured had the discussion with the agent, he unknowingly left North America with no way to be contacted.  His estranged wife was seemingly unconcerned about insurance matters.  You can probably guess “the rest of the story”.  A few days after the original homeowner’s policy expired, and with the agent frantically attempting to get in touch with someone about the rejection of the application, a large loss occurred.

In my opinion, considering all the evidence in this case, the agent acted within an acceptable standard of care.

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Note: Information in these blogs is not intended to replace any legal or financial professional information.

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