You Didn't Tell Me!

You thought you had coverage, but you didn't. Or maybe your agent didn't tell you about a particular type of coverage or advised you incorrectly, and you suffer a loss. Do you have recourse against your insurance agent? Possibly.

Increasingly, insurance agents are facing errors and omissions claims for failing to advise clients properly. "When someone is told there is no coverage, they need to investigate further and find out why," says Brian Gilchrist, an attorney with Allen, Dyer, Doppelt, Milbrath & Gilchrist, P.A. in Orlando who works a lot with insurance law.

According to Gilchrist, some common mistakes for which agents are being sued include failing to procure adequate coverage; procuring coverage with unacceptable exclusions or conditions; selling policies from financially troubled carriers; renewing policies on different terms without notice to the insured; failing to offer additional or optional coverages; and failing to insure all necessary people, entities and property.

Gilchrist says agents should take the time to understand your business and your needs. "The agent's duty is to act as more than a retailer of whatever policies are behind his desk," Gilchrist notes. If you suspect your agent of professional negligence, contact an attorney experienced in insurance law.

Jacquelyn Lynn is a freelance business writer in Orlando, Florida.

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This article was originally published in the March 2003 print edition of Entrepreneur with the headline: You Didn't Tell Me!.