Promises, Promises

For plaintiff's counsel, the easiest way to define the standard of care to the client is show what the agent or broker promised in writing to do.

For this article only, I'm using as an example the Independent Insurance Agents and Brokers of America, Inc. (IIABA), which states on its website:

Whether you are searching for Personal or Business insurance, a Trusted Choice® Independent Agent is free to shop multiple providers on your behalf. More freedom means more options and more savings for you.

The IIABA's Pledge of Performance says that Trusted Choice® agents will, among other things:

• Work with you to identify the insurance and financial services that are right for you, your family or your business and use our access to multiple companies to deliver those products.

• Guide you through the claims process for a prompt and fair resolution of your claim.

• Use our experience and multiple company relationships to customize your coverage as needed.

This well-written and comprehensive pledge of service to customers is also a blueprint for building the plaintiff's case. Here is the way they might be challenged in an E&O claim:

• "Use our access to multiple companies[.]" What if only one option for coverage was presented, when another one with a smaller premium was also available?

• "Identify the insurance and financial services that are right for you, your family or your business[.]" What if the agent is licensed to sell insurance, not securities?

• "Guide you through the claims process for a prompt and fair resolution of your claim." Agents and brokers can provide guidance and some advocacy, but they can't generally write checks on insurers' bank accounts. Prompt, fair resolutions are the goal, but are outside the agent/broker's control.

• "Customize your coverage as needed[.]" Insurance policies often need customizing. For example, it may be impossible to find a jeweler's block policy that covers off-site sales or inventory in display cases overnight.

Issues such as these are not unique to the IIABA's high standards. What coverage is "needed" depends on who is speaking.

If it's the broker, who wasn't told about the applicant's home-based business, a rider or separate policy for that business didn't seem "necessary" when the homeowner's policy was placed. If the speaker is the policyholder on the day after an uncovered business loss, the "necessity" of the coverage is clearer in hindsight.