Independent Insurance Agents: Order Takers or Fiduciaries?
Article co-written by C. Thomas Ludden, litigation Partner at the Lipson Neilson law firm, and James R. Redeker, claims manager in the Insurance Agent’s E&O Program at SwissRe Corporate Solutions.
An insured has a significant loss, but discovers that the insurance company will not cover the loss under the insurance policy that had been purchased. One of the potential options that an insured may consider pursuing is a claim against the insurance agent who was involved. Whether that claim is ultimately successful may depend upon whether the agent is considered a fiduciary of the insured or the agent has assumed duties in addition to the duty of ordinary care.
The answer to these questions depends upon:
1. Whether the agent is an independent or captive agent;
2. What duties are normally imposed by the applicable jurisdiction;
3. Whether the agent and the customer have agreed that the agent would perform additional duties;
4. Whether the agent has performed acts or omissions that trigger additional duties; and
5. Whether unique circumstances exist that will impose additional duties upon the agent…Click here for full article.