The prior lesson discussed the importance of communicating with your independent insurance agent and reviewing his/her work. If there is an error in the insurance application or if the policy does not cover what it should, the policyholder can be left holding the bag with nobody to sue.
As a side note, this is why I frequently communicate directly with the insurance company.
I am not shading agents here. There are lots of great agents out there. I know many and I’d be happy to refer you. It’s just best practice to always review everything.
So, when can an independent agent have liability?
When there is a “special relationship” under the factors set forth in Harts v Farmer Ins Exch, 461 Mich 1 (1999).
The Harts Court stated that a special relationship exists if:
- the agent misrepresents the nature or extent of coverage;
- the insured makes a request that requires clarification;
- the insured makes an inquiry and the agent provides inaccurate advice; or
- the agent assumes the additional duty by express agreement or promise to the insured.