7 Steps to Take When Your Client Gets Sued

People buy liability insurance to protect themselves against suits claiming negligence or other covered tort. Those policies are usually purchased through the efforts of an insurance agent or broker who transacts insurance on behalf of the person seeking insurance. Written contracts between the insured and the agent and broker are rare and, even when they exist, seldom discuss the duties of the agent and broker in the event of a loss or claim. The prospective insured and the agent or brokers, by tradition, believe they know what services the broker or agent will provide to the insured.

When a suit is filed against a person insured, the wording of every liability insurance policy requires the insured to report that suit to the insurer in writing. Most insurers find a notice made orally to the company or the agent sufficient since the agent or broker will convert the oral report from the client to a written ACORD Notice of Loss and immediately deliver the notice to the insurer. Most insureds, who have no personal relationship with the insurer, do not know how to give notice to their insurer and will call their agent or broker, describe the loss, or deliver a copy of the suit and expect that the agent or broker to pass the notice to the insurer.