Common Types of Insurance Broker Malpractice

Protecting Yourself against Wrongful Conduct by an Insurance Professional

If you’re like most people, when it comes to insurance, you have a basic understanding of the concept—you’re paying a premium, based on an assessment of the amount of risk you pose, so that you’ll have coverage in the event of a loss. Beyond that, you trust the agent or broker to handle the details, so that you have the type of protection you need at a reasonable cost. Unfortunately, there are insurance brokers who engage in wrongful conduct, either intentionally or carelessly. Here are some of the ways you can be victimized by insurance broker malpractice:

• The agent/broker inaccurately states what coverage is provided by the policy — The broker may assure you that there’s coverage for certain losses, when, in fact, the policy does not reimburse you or cover those types of losses
• The broker fails to obtain the coverage you requested — You may have completed the application and even written a check, but the application never got submitted to the insurance company
• The broker fails to notify you that a policy has changed or has been prematurely cancelled — It’s not uncommon for an insurer to prematurely cancel a policy—maybe you were in an accident and it changed your risk profile. The insurer must notify you if the policy will be changed or terminated before the end of the policy date.
• The broker fails to tell you about financial problems the company is experiencing — The broker must disclose knowledge of any issue that might affect the insurance company’s ability to pay a claim
• The broker fails to submit a legitimate claim — When you notify the broker of a valid claim, the broker must take all necessary action to ensure that your claim is submitted to the insurer.

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