In Property & Casualty Insurance Procurement & Litigation (Ten Recurring Themes Every Lawyer Should Know) insurance expert witness David L. Stegall, CPCU, ARM, ARe, RPA, of Risk Consulting & Expert Services writes on ten recurring themes that often lead to litigation. Attorneys either dealing in insurance procurement litigation issues or with clients who purchase insurance may want to consider these ten themes:
Theme 5 of 10 An agent, more often than not, has a duty to advise (his clients). In the 2007 study “INSURANCE AGENTS’ DUTY TO ADVISE”, The Hassett Law Firm, P.L.C., of Phoenix, AZ, dealt with this question in an article by the same name. Two-thirds of the states’ case law indicates that, yes, agents do have a duty to advise their clients, at least on a case-by-case basis. This duty may be difficult to establish in 13 states, and agents are considered simply “order takers” in five states (AL, MT, RI, UT, WV). Attorneys need to check their specific state statutes and case law on this issue. As regards the precise scope of this duty, variances do exist between each state.
Lesson #5: Agents (in most cases) have a duty to do more than to just place coverage and have a responsibility to use their special knowledge to the benefit of their clients.
Reoccurring Conclusion: Just like poor legal advice, poor understanding of insurance procurement issues can be very expensive for your client!
David Stegall is the Principal Consultant at Risk Consulting & Expert. Mr. Stegall holds a B.A. in Communication from Auburn University and is a Chartered Property and Casualty Underwriter, an Associate in Risk Management and an Associate in Reinsurance, all awarded by The Institutes in Malvern. PA. He is also a Director of the Society of Risk Management Consultants.