Top Liability Allegations Against Insurance Agents

Top Liability Allegations Against Insurance Agents

Professional liability attacks happen all the time, and trying to bounce back from baseless or even substantiated claims can be expensive and frustrating. Insurance agents aren’t immune to claims against their services, but carrying E&O insurance for insurance agents can help mitigate the financial impact these claims could bring against their business. There are some claims that occur more commonly than others and knowing what they are can help you proactively avoid having them made against you.

The Top Claims

Just about one out of every four allegations of errors are attributed to a failure of the agent to procure coverage. Agents are under a good faith obligation to use a reasonable amount of effort and diligence to secure the right insurance coverage for the client’s needs. However, if the agent isn’t able to obtain the coverage desired, a client can issue a claim of negligence or breach of contract. Insurance agents must exercise reasonable skill and care in their efforts, carefully documenting the process and all communication with the client.

After failure to procure, failure to adequately explain the provisions of the policy is the second most alleged claim against insurance agents. Taking the time to clearly outline the coverage of the policy, as well as educating clients through multiple channels can help reduce the success of these claims in court.

Both insurance and awareness can prevent agents from being the victim of a baseless E&O claim.