Everyone makes mistakes, and while we know that no one is perfect, some mistakes, which occur in life are at the hands of trusted professionals, such as insurance agents. When this does occur, it may lead to defense of a lawsuit by a client citing a costly omission, or misrepresentation of some type.
Often the error is slight and can be handled appropriately without litigation. But there are times when, whether intentionally or not, a client is the victim of negligence or a careless omission that causes them a serious financial loss. This is particularly the case when it comes to insurance coverage disputes and denied claims. This is when having professional liability coverage for the insurance agent can really be helpful.
Omissions and misrepresentations can be damaging to a reputation
For most agents, liability issues often are the result of simple mistakes and not intentional acts designed to hurt their clients. Other agent liability issues unfortunately arise from a deliberate action on the part of the agent. Some agents may knowingly sell a policy that includes unnecessary insurance or coverage not requested, or may make claims that they are offering a comprehensive policy without mentioning significant gaps in coverage or caps on recovery amounts. This can create tension, especially if there is a loss that is not covered, and may ultimately lead the customer to seek the advice of an attorney if the issue cannot be resolved in any other way.
After apprising the agent of his or her mistake, if a resolution can’t be reached (in some cases the agent will acknowledge their oversight when it is brought to their attention) then the customer may determine that this is a matter for the court to decide. Right or wrong, having insurance agent professional liability coverage will come in handy if the situation becomes a legal matter.