As an insurance agent, you know by now how important it is to remain compliant. While following the Medicare Advantage & Part D Communication Requirements should be one of your top priorities, there is something else you’ll want to keep on your radar that you may have not yet considered: preventing insurance agent negligence.
Listen to this article:
We’ll cover what constitutes as negligence (and how to prevent it) so you can be sure you’re giving your clients paramount service.
What Is Insurance Agent Negligence?
An insurance agent negligence claim can arise when you, the agent, make a mistake that leads your client to believe they have coverage that they don’t have. It can also be an error on your part that later leads to your client being denied coverage. If you make this type of mistake, your client may be able to seek compensation for damages. Your client can file a claim against you for the following reasons: failure to procure requested coverage, failure to obtain coverage, misrepresentations, failure to properly advise clients of coverage, and/or errors and omissions.
According to the law, it does not matter if your mistake was intentional or unintentional; it only matters that you were the one to make the mistake. However, laws can differ from state to state and are not nationwide. Specific duties are spelled out in more detail in each state’s codes or statutes, but there are many similarities across the board.
Can My Client Sue Me?
Yes, your client can sue you if you are guilty of insurance agent negligence. According to FindLaw, in order for your client to sue you on the grounds of negligence, generally, they must be able to prove the following:
- Duty: You had a duty to act or refrain from acting in a certain way.
- Breach: You failed in your duty toward your client.
- Causation: The breach of duty caused your client harm that you, the agent, should have foreseen.
- Damages: Your client suffered actual damages (such as lost wages and medical expenses).
The consequences of insurance agent negligence can be quite grave – for you and your client. Being sued could potentially cost you a lot of money and negatively affect your business, but the effects your client may suffer could be even worse. We encourage you to steer clear of any of these wrongdoings not just to avoid the consequences, but so your client doesn’t experience the detrimental outcome.
How Can I Avoid Insurance Agent Negligence?
The easiest way to prevent insurance agent negligence is to do your job correctly, carefully, and morally. We understand mistakes can happen, but in an industry such as this, slipups can be costly. Be sure to double check your work, and if you’re unsure of something, don’t be afraid to admit that to your client. Be honest and take the time to find the answers they need. Lying is never ethical and could come back later as a serious problem.
Additionally, never, under any circumstances, make false claims or false promises to clients. Making sales as an insurance agent is a priority, but really your top priority should be finding a plan that works for your client. Overselling a plan by making your client think they will have the “perfect” coverage can hurt both them and you in the long run. Walk through plan options with your clients thoroughly. You may not be able to find a plan that’s exactly what they’re looking for, but if you have a diverse portfolio, there should hopefully be an option that fits the majority of their needs.
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Insurance agent negligence is something that every agent should be aware of and know how it can affect them and their clients. The bottom line is to remain ethical, do the right thing, and be honest with yourself and with your clients. If you do this and follow the Medicare Advantage & Part D Communication Requirements, you’ll be golden!