Many people rely on insurance brokers and agents to choose policies that best fit their interests. They assume that these brokers and agents have a duty to act in the customer’s best interest and not their own. By the letter of the law, this is indeed true.
All insurance brokers and agents in Los Angeles have a fiduciary duty to protect the financial well-being of their clients. Any violation of this duty creates a cause of action for a person to sue their broker. In addition, an individual may be able to argue that their agent was negligent in helping them choose a policy and that this negligence resulted in financial damage.
A Los Angeles insurance broker and agent negligence lawyer can evaluate the actions of insurance professionals to determine if they violated their fiduciary duty. If so, the experienced attorney can issue demand letters for any damages resulting from this breach of duty.
Fiduciary Duty
According to California Civil Jury Instruction 4100, a fiduciary duty is a duty to act with the utmost good faith and in the best interest of the individual. All insurance brokers and agents assume this duty whenever they take on a new person as a client.
This duty extends throughout the length of the business relationship and covers all transactions. In other words, there is a duty for the insurance professional to choose plans that best fit the individual’s needs, not those of the professional.
How Insurance Professionals May Violate Fiduciary Duties
Whenever a person owes a legal duty towards another, they are obligated to provide protection. When they fail to provide this protection and the protected person suffers harm as a result, they can be held legally liable for damages. This is known as the legal concept of negligence.
Negligence applies when any person causes injury to another through an accident—in other words, the defendant did not mean for any harm to come to the injured person, but nevertheless, an injury occurred. In the case of insurance, the injury is financial.
Any act of negligence is a cause of action to demand compensation in court. In addition, a breach of the fiduciary duty counts as an unfair trade practice in California, according to insurance law. This provides people harmed by broker negligence with an additional cause of action to sue for damages in civil court.
A broker and agent can also be liable if they misrepresent material facts about the coverage. If the facts of the individual’s coverage are misrepresented and they suffer a loss that is not covered, then it is possible the agent or broker is responsible for the excess uninsured loss.
Filing Suit Against a Negligent Insurance Broker
A person’s damages typically consist of the money that they lost due to the insurance agent’s actions. However, lawsuits alleging unfair business practices can also claim compensation for attorney’s fees and court costs.
A Los Angeles insurance broker and agent negligence lawyer can help author 30-day demand letters, and when applicable, file lawsuits alleging breaches of fiduciary duty.
Los Angeles Insurance Broker and Agent Negligence Lawyer Can Work to Set Things Right
No business should take advantage of people, especially not businesses such as insurance agencies that have their people’s financial futures in their hands. All insurance agents and brokers have a fiduciary duty to act in the best interests of the individual and can be held legally liable for any damages resulting from actions—or failures to act—that breach this duty.
The process to hold these insurance professionals responsible can be complicated. However, a Los Angeles insurance broker and agent negligence lawyer can work with you to examine steps taken by insurance professionals and determine if any negligence has occurred. They may then author 30-day demand letters asking for compensation and even take your case to court if needed.
