Errors & Ommissions

[Josh]

I understand your frustration, however, a very high percentage of E & O lawsuits involve failure to perform services. For example, an agent sells an annuity and didn't advise the clent that he should have a medicare supp. Or a final expense agent should have known and recommended a prospect get lltc insurance.

A good friend of mine was drummed out of the business because he sold a client a term life policy in response to a term life card he sent out. 2 years later the client was disabled. He sued the agent because the agent "should have told him about disability insurance". His lawyer argued that the agent did not do a thorough review of all his insurance needs for which the agent was licensed to sell. Had he done so, his client would have bought the disability.

California court room and jury- guy in wheelchair vs. agent that made a nice life insurance commission. Guess who won.

As others have pointed out, it costs $50 to file a frivolous lawsuit and thousands to defend against it.

It's less out of frustration and more out of curiosity. What has really peaked my interest is why Medicare Advantage companies are mandating the agents have it.
Could you let me know where you got your statistics? That's wild.

 

[policy doctor]

A good friend of mine was drummed out of the business because he sold a client a term life policy in response to a term life card he sent out. 2 years later the client was disabled. He sued the agent because the agent "should have told him about disability insurance". His lawyer argued that the agent did not do a thorough review of all his insurance needs for which the agent was licensed to sell. Had he done so, his client would have bought the disability.
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How come I always hear these stories, but never see a link to a real court case or the final verdict?
And it's always a new poster who cites this.

If this was the case for the average insurance agent, not a CFP, then we should all have a form listing every insurance product known to man. Now the "informed client" can initial or sign off that every item was presented or suggested and that he CHOSE NOT TO BUY.

Just because you have an insurance license doesn't make you an "expert" in all insurance products.

 

[Tomfromtheshade]

I understand your frustration, however, a very high percentage of E & O lawsuits involve failure to perform services. For example, an agent sells an annuity and didn't advise the clent that he should have a medicare supp. Or a final expense agent should have known and recommended a prospect get lltc insurance.

A good friend of mine was drummed out of the business because he sold a client a term life policy in response to a term life card he sent out. 2 years later the client was disabled. He sued the agent because the agent "should have told him about disability insurance". His lawyer argued that the agent did not do a thorough review of all his insurance needs for which the agent was licensed to sell. Had he done so, his client would have bought the disability.

California court room and jury- guy in wheelchair vs. agent that made a nice life insurance commission. Guess who won.

As others have pointed out, it costs $50 to file a frivolous lawsuit and thousands to defend against it.

That sounds like some bullshitsky to me. I am licensed to sell life, health, and variable. Does this mean that when someone returns a mortgage protection card that I am supposed to assess all of their insurance and financial needs top to bottom and offer them every product that I am licensed to sell? I went there to cover his mortgage in case he dies. If I go there under that purpose and do that exact job before I leave the house and there is nothing wrong with the policy that I sold him I don't see where the case is.

I'm not saying that it didn't happen. Im just saying that its shitty.

 

[NPCOACH]

That sounds like some bullshitsky to me. I am licensed to sell life, health, and variable. Does this mean that when someone returns a mortgage protection card that I am supposed to assess all of their insurance and financial needs top to bottom and offer them every product that I am licensed to sell? I went there to cover his mortgage in case he dies. If I go there under that purpose and do that exact job before I leave the house and there is nothing wrong with the policy that I sold him I don't see where the case is.

I'm not saying that it didn't happen. Im just saying that its shitty.

It does suck, but it does happen. Don't take my word for it. Call your E & O carrier and ask them what percentages of claims are for "failing to offer coverage or make appropriate recommendations".

This is specially true for agents that offer annual insurance reviews to clients or want to review their coverage. If you are going to sell a single policy and not look at anything else then you would be prudent to have the client sign a letter stating something along the lines of
"Joe Agent came to my house to sell me a medicare supplement only. He dd not review or recommend any other coverages, nor did I want him too".

With something like that you will be fine. Remember most agents never get sued. That is why you get $1,000,000 of coverage for $600. Most houses never burn down. But we still carry homeowners insurance.

But do you think that there are no lawyers out there that will go after an insurance agent that doesn't talk about LTC to a senior client when the agent knows or should know that 40% of clients end up in a nursing home or needing long term care services?

 

[NPCOACH]

A good friend of mine was drummed out of the business because he sold a client a term life policy in response to a term life card he sent out. 2 years later the client was disabled. He sued the agent because the agent "should have told him about disability insurance". His lawyer argued that the agent did not do a thorough review of all his insurance needs for which the agent was licensed to sell. Had he done so, his client would have bought the disability.
***********************************************

How come I always hear these stories, but never see a link to a real court case or the final verdict?
And it's always a new poster who cites this.

If this was the case for the average insurance agent, not a CFP, then we should all have a form listing every insurance product known to man. Now the "informed client" can initial or sign off that every item was presented or suggested and that he CHOSE NOT TO BUY.

Just because you have an insurance license doesn't make you an "expert" in all insurance products.

The average insurance agent is supposed to be knowledgable about the products he represents and let the client know his limitations. You don't have to be an expert - but you are supposed to be knowledgable. If you are there to only sell a medicare supplement then have a client sign a letter saying
"Joe Agent discuused medicare supplements with me. He did not discuss any other areas of potential insurance needs nor did I want him to do so."

Not many agents carry a business card that says "I offer medicare supplements only and nothing else". More often it is something like "We serve all your senior insurance needs".

Many agents, propbably less experienced then you, offer clients annual reviews or get the appointment on the basis of reviewing their insurance. Often they use lead cards that talk about changes in elder law, etc.

If you are licensed to sell LTC and sit down with a senior client that has a 40% chance of ending up in a nursing home or needing LTC services and don't even mention it - there will be some clients or children of clients that will come back and ask why you didn't even talk about it. And sometimes they will hire lawyers to ask instead.

Don't take my word for it - or slam me for it. Just take 5 minutes and call and E & O insurer and ask the what percentage of claims arise from an agent failing to recommend a needed coverage. Then get back to us.

 

[SoCalBroker]

Let me assure its no BS brother. $50 to file and then its all on you to prove innocence. guilty until proven innocent - trust me.

24 yrs in - 3 E&O claims filed against me.

Indemnity Paid : $0

Defense Costs Paid : $ uwoooodntfriggenbelieveit!

Claim 1: Pers Lines client actually claimed that we should have reminded her "more frequently" to get appraisals on her heirloom jewelry. We advised her in writing 3 times it wasnt covered but she had it in her "notes" we were to remind her in 3 months to get updated appraisals on grandma's $40k heirloom broach. Mysterious disappearance loss. Go figure. We prevailed in front of the judge.

Claim 2 : Wholesaler [to remain unamed] provides a surplus GL policy for my client - promoter of a car show event attended by 15,000 people in Long Beach Convention Center. A 13 yr old kid gets stabbed in a gang related incident. Parents sue the city, my client and the LB Police and everyone within a 100 mile radius of the event. $3m in damages

Wholesaler - ohhh trusted carrier - PARTNER... says bummer for you man - theres an Assualt and Battery Exclusion on this policy. We say ohhh no there isnt brother - the quote has nothing on it ... your BINDER confirmation has every policy exclusion listed "except" that one - nowhere does it advise there is an A&B exclusion.

Fortunately for all - the jury decided that the insured had no further duty to the kid & the family to ensure his safety at the event - past having the Long Beach Police Dept There, and wanding the entrants, and having prof security. Not liable. Huge sigh of relief.

We had to put our carrier on notice at the beginning cuz the GL ins co advised they would deny liability and take their chances with our E&O carrier, and felt they'd get a split decision ...We used to carry a single $1m - no mas. $25k in claims defense cost on that one kids.

We were right - we did it all right and would have prevailed ultimately - but at a huge huge huge defense cost.

This aint no - my friends 2nd cousin's sisters boyfriend once ... kinda story gents - first person real life shiz nizzle!

3rd Claim : Was where a Franchise Corp got sued by the feds for not having the proper Agricultural license to transact food and fruits and levied them for $350k in back fees and fines as an unlicensed food producer. They entered into BK and the trustee let the D&O policy lapse - big huge no no. Well the carrier and premium finance co Firemans Fund and AICCO - fornicated this to the high heavens. Defunct insured, prem finance co cancels the D&O policy for non payment, sends a return prem, we send the RP to the trustee - policy cancelled ... Same ol **** diff day right? Nope ....

Well the investors in the co want to sue the snot out of the Board of Directors for not having the license and pissing away their investment. Sorry charlie - Claims Made D&O - Firemans Screams ... no way man its cancelled. D's & O's start screamin at us going "hey you better get them [Firemans] to defend us ... or we sue your E&O"

Trustee got firemans fund to see it their way - reinstate and defended. But once again ... we were forced to put our E&O carrier on notice and file some papers for - $10k. Fun n Games my friends!

No matter how right you are - you can amd will get sued and screwed - especially here in the CALI.

$1m really isnt enough anymore for P&C guys - IMHO.

That sounds like some bullshitsky to me. I am licensed to sell life, health, and variable. Does this mean that when someone returns a mortgage protection card that I am supposed to assess all of their insurance and financial needs top to bottom and offer them every product that I am licensed to sell? I went there to cover his mortgage in case he dies. If I go there under that purpose and do that exact job before I leave the house and there is nothing wrong with the policy that I sold him I don't see where the case is.

I'm not saying that it didn't happen. Im just saying that its shitty.

 

[georgeharrison]

Thanksss
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I know of a good source in case you are shopping for E&O.

Hello
I'm interested, what is this source, we say that?

 

[StrategyMan]

What are the organization start up fees?

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Portland Health Insurance, Portland Life Insurance, Portland Disability Insurance, quotes

 

[flauto-insurance]

E and O Coverage of America is a scam, they are not an insurance company and ask them how much they have in reserves to pay for claims. They won't tell you becuase they have $0. They are not registered with anyone as anything. This is a joke and a scam.. buyer beware!

 

[SCLady]

E and O Coverage of America is a scam, they are not an insurance company and ask them how much they have in reserves to pay for claims. They won't tell you becuase they have $0. They are not registered with anyone as anything. This is a joke and a scam.. buyer beware!

While people should take heed of your warning, they tell you that they're not an insurance company, and, since they aren't, they aren't require to have a reserve. A little reading while provide that information. No person should sign up on any website without reading and researching.