Insurance agents or Managing General Agents (MGAs) can potentially be sued for negligence, errors, and mistakes in the course of their duties. As professionals in the insurance industry, they have a duty to act with reasonable care and skill when providing insurance advice, recommendations, or handling policy-related matters.
If an insurance agent or MGA fails to fulfill their duty of care, resulting in harm or financial loss to their clients, they may be held legally liable for their negligence. Some examples of situations where insurance agents or MGAs can be sued include:
Failure to procure appropriate insurance coverage
If an agent fails to accurately assess the insurance needs of a client or neglects to recommend adequate coverage, and the client suffers a loss that could have been covered by proper insurance, the agent may be sued for negligence.
Misrepresentation or failure to disclose information
When an agent provides false information or fails to disclose important details about the policy terms, conditions, or exclusions that could affect the client's coverage, the agent may be held liable for any resulting losses.
Errors in policy documentation or administrative processes
An agent or MGA could make mistakes when preparing policy documents, issuing policies, or handling administrative tasks. If these errors result in harm or financial loss to a client, they may be sued for negligence.
Breach of fiduciary duty
Insurance agents and MGAs have a duty to act in their clients' best interests. If they prioritize their own interests or act in a manner that breaches their fiduciary duty, they may be held liable for any resulting harm or financial loss.
It's important to note that insurance agents and MGAs must carry Professional Liability Insurance, which provides coverage for claims arising from professional negligence. This insurance can help protect agents and MGAs from financial damages resulting from lawsuits related to their professional activities.