Filed Under:Agent Broker, Coverage Issues

No Duty to Benefit Consult

Unless compensated as a counselor, an agent’s responsibilities are limited

Insurance agents have a duty to fulfill the requests of their principal. Insurance agents, at least in Iowa, have little or no duty to the beneficiary of a life insurance policy. In Michele M. Pitts v. Farm Bureau Life Insurance Co. and Donald Schiffer, No. 1-535, 11-0117 (Iowa App. 10/05/2011), the Iowa Court of Appeals was asked to resolve who is entitled to the beneficiaries of a life insurance policy.

Michele M. Pitts appealed a district court order granting defendants’ motion for summary judgment on claims of negligence, negligent misrepresentation and respondeat superior. She filed several tort claims against her husband’s insurance agent and insurer for failing to designate her as the sole beneficiary on her husband’s life insurance policy. The district court granted summary judgment in favor of the defendants. On appeal, Pitts asserted the trial court erred because of genuine issues of material fact that precluded summary judgment.

Michele also asserted Schiffer owed her a duty of care and genuine issues of material fact exist as to whether he was negligent in exercising that duty. Michele’s argument that she is a third-party beneficiary is premised exclusively on tort theories. She did not raise contract theories to support her claim for relief.

Duties of the Agent

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