A Guide to Insurance Agent Negligence Prevention
Keeping within compliance guidelines is one of the most important things an insurance agent has to keep in mind while running their business. This isn’t saying that following the communication requirements from Medicare Advantage and Part D aren’t important, but if you get into a situation where there is suspected trouble, those communication requirements will be the least of your worries.
Another thing that agents need to be constantly mindful of is preventing insurance agent negligence with themselves and within their business.
Negligence is a known problem in the insurance industry, but with diligence and patience, you can make sure you don’t become a statistic.
Read on to see what exactly constitutes insurance negligence, and how to make sure you prevent it to ensure you’re giving your clients the best service possible.
What Comprises Insurance Agent Negligence?
Insurance agent negligence claims come about when you as the agent commit an error and your client is led to believe they have coverage that they don’t have.
Negligence claims can also come about if you make a mistake that leads to a denial of coverage for your client.
When agents and brokers make these types of mistakes, clients can end up suing insurance agents and they could receive compensation for damages from the offending agent.
These lawsuits can be costly for you, and your business.
There are a number of reasons why a client could file negligence claims against their insurance agent:
The insurance agent fails to get the coverage the client asks for, they fail to get the right coverage for the client, the agent fails to adequately explain and advise the client of coverage that they’re actually getting, they misrepresent the coverage the client gets, or because omissions and errors in the plan, coverage, or what the agent told the client.
An important thing to note is that no matter whether the mistake or error was made in bad faith or not, you can still be held liable as the one who committed the error.
Laws do differ between states, and each state’s laws are clearly stated in their insurance codes.
Many laws are quite similar between each state, though. Also, these laws are not nationwide, so if you are selling insurance in multiple states, you need to make sure you’re following all of the codes and statutes for each state that you are providing insurance services in for your clients.
Can My Client File Suit Against Me?
If you have committed an act of negligence, your client can sue you.
There are a number of things your client will have to prove to be able to file negligence claims against you; Duty, Breach, Causation, and Damages.
Insurance brokers have a duty to act or not act in a certain way toward their clients.
This breach must have caused foreseeable harm to the client, and your client has to have damages to claim such as undue medical expenses or loss of wages.
These breach of faith issues must be proven, but the burden often falls on the agent to prove that there was no negligence.
The best course of action, as always, is to make sure that there is no negligence in the first place to avoid any legal troubles.
When an agent commits negligence, the harm is spread between the agent, their client, and possibly the client’s family.
If the agent is sued, it could be expensive because of damages and lawyer fees, cause business interruption, and even a loss of business from a bad reputation.
Though a loss of money and business is definitely detrimental to an agent, the effects felt by the client and their family could have some extremely grave consequences.
Diligence as an agent is imperative to make sure that not only you, but your client never have to realize just how awful negligence can be.
Another thing that agents need to be constantly mindful of is preventing insurance agent negligence with themselves and within their business.
Negligence is a known problem in the insurance industry, but with diligence and patience, you can make sure you don’t become a statistic.
Read on to see what exactly constitutes insurance negligence, and how to make sure you prevent it to ensure you’re giving your clients the best service possible.
Ways to Avoid Insurance Agent Negligence
There are a number of different ways to help prevent insurance agent negligence, but by far the best way is to accurately, morally, and mindfully do your job.
Everyone knows that sometimes mistakes do happen, but mistakes with insurance coverage can be extremely costly.
Going over your work twice, making sure to ask questions, and being honest with your client are also good practices to keep.
If you don’t know something, be honest with them.
Not only will you gain more trust with them, but it will help with building that special relationship.
Another must is to make sure you never ever make false or misleading promises or claims to a client.
Your sales and bottom line are most definitely of high importance, but your first order of business should always be to make sure you find your client their specifically requested coverage that will work for them.
The last thing you want is to oversell your clients, and then have them upset with the cost of coverage and benefits in the end.
A thorough approach to going over different types of insurance and coverages with your client will go a long way.
It can be difficult at times to find your clients an insurance plan that covers everything they’re searching for.
If you have a diverse portfolio, with coverage from a number of insurance companies, you should be able to find them something that will satisfy most of their insurance needs.
Negligence in the insurance industry is something that all insurance agents brokers should be wary of, and most definitely should understand as far as how it can affect them, their clients, and their business.
The main takeaway should be that being honest, sincere, ethical, and accurate are the most important ways to make sure that you stay compliant.
Following these guidelines and making sure you stay within the scope of Medicare Advantage and Part D Communication Requirements is the first and biggest step to making sure you do everything you can to avoid committing insurance agent negligence.
It will help you avoid issues with client insurance claims, and from hearing from their insurance attorney.
