The following is an excerpt of an excellent article authored by Burke Coleman of Demotech Inc. that appeared on www.claimsjournal.com on May 7th.
“Policyholders rely on their insurance agents to acquire insurance coverage. Generally an agent has a duty to obtain the requested coverage with reasonable care and diligence or inform the client of his inability to do so, but the agent has no continuing duty to advise the insured on the adequacy of coverage. In turn, most states say policyholders have a duty to read the policy, although failure to do so may not always bar a claim. When insureds are unable to recover from an insurance company, they will often blame their agent and seek recovery from them. Courts have been careful to balance this relationship, trying to ensure that consumers with limited insurance knowledge are protected while also shielding agents from undue liability when things go awry. Various rules and exceptions across jurisdictions complicate questions of liability.”
Continue Reading Agent Liability Limited by Indiana Court, Expanded in New York