The Claim of Material Misrepresentation on a Life Insurance Application Sharpen Your Skills With Our E&O Claim Scenarios We believe that insurance professionals can improve the service that their clients receive by sharpening their professional skills by looking over case studies and scenarios that have led to E&O claims. Facts The agent assisted his client with the completion of an application for a $500,000 life insurance policy. The application was completed and submitted … [Read more...]
E&O Claims Scenario: The Claim of Failure to Advise of Coverage Options
Sharpen Your Skills With Our E&O Claim Scenarios We believe that insurance professionals can improve the service that their clients receive by sharpening their professional skills by looking over case studies and scenarios that have led to E&O claims. Facts The agent sold the client a disability income policy, which provided benefits of $5,000 per month until age 65. The client became disabled when he was 55 years old, and the insurer commenced payments under the policy. However, … [Read more...]
E&O Claims Scenario: Did the Agent Misrepresent a Long Term Care Policy?
Sharpen Your Skills With Our E&O Claim Scenarios We believe that insurance professionals can improve the service that their clients receive by sharpening their professional skills by looking over case studies and scenarios that have led to E&O claims. Facts An agent sold his client a long-term care policy, after representing that it would provide comprehensive protection in the event that he was confined to a nursing home. The client, who was 75 years old, became ill and needed … [Read more...]
E&O Claims Scenario: The Claim of the Missing Application
Sharpen Your Skills With Our E&O Claim Scenarios We believe that insurance professional can improve the service that the client receives by sharpening their professional skills by looking over case studies and scenarios that have led to E&O claims. Facts The agent took an application for a $100,000 term policy insuring the life of the client. The application was completed, but the client was not provided with a conditional receipt or binder. The agent gave the application to his … [Read more...]
E&O Claim Scenario: Umbrella Claim
Facts An agent had been servicing a client’s personal insurance account for many years, which included an auto, a homeowner’s and an umbrella policy. The client terminated the auto policy as he was able to procure auto insurance from another carrier for less premium. The umbrella and homeowner’s insurance policies remained in force. As a result of the termination of the auto policy, the umbrella policy only applied in the event of a claim under the homeowner’s policy. Umbrella Policy Coverage … [Read more...]
E&O Claim Scenario: To Borrow or Not To Borrow
Facts Mr. and Mrs. Smith are high net worth individuals. Much of their wealth, however, is in real estate. A few years ago, they met with an Insurance Agent who identified a life insurance need. Based on their situation, the Agent concluded that the Smiths could use $5 million in life insurance coverage. The Agent recommended a whole life policy that earns dividends and builds cash values. Based on their age and health, the annual premium for such a policy was $175,000. The Smiths did not … [Read more...]
E&O Claim Scenario: Know What You Are Selling
The Massachusetts Supreme Judicial Court recently issued a decision affirming the potential liability of an insurance agent and insurance company for oral misrepresentations made by the agent. In that case, the plaintiff alleged, and the trial court found, that the insurance agent had misstated the benefits provided by a life insurance policy; assuring the plaintiff that the policy provided a $500,000 death benefit when, in fact, it provided only $200,000. Despite the existence of policy … [Read more...]
E&O Claim Scenario: If It’s Not Documented, It Didn’t Happen!
The Agent sold Dr. and Mrs. Jones two 20-year term policies in 2000, each having a $5 million death benefit. Dr. and Mrs. Jones are high wealth clients with many insurance and investment products in their portfolio. The monthly premiums for these particular policies were $300/month for Dr. Jones and $250/month for Mrs. Jones. Their policies were set up to pay the premiums through automatic monthly bank account deductions. The Update To The Policies In 2010, the Joneses wished to replace … [Read more...]
E&O Claim Scenario: “Imperfect File Administration?”
Sharpen Your Skills With Our E&O Claim Scenarios We believe that insurance professional can improve the service that the client receives by sharpening their professional skills by looking over case studies and scenarios that have lead to E&O claims. Application Submitted to Two Carriers A client came to an agent seeking life insurance. The application was submitted to two carriers, Carrier A and Carrier B. An application was completed which denied the existence of a pre-existing … [Read more...]
E&O Claim Scenario: “More Than Just A Sale”
Improving Your Professional Skills We believe that an insurance professional can improve the service that the client receives by sharpening their professional skills by looking over case studies and scenarios that have lead to E&O claims. An Errors and Omissions Case Study: The Facts Sally was a 50-year-old who had worked for a large national transportation company for 20 years. At the time of the transaction in question, her annual salary was $60,000. Technological advancements plus … [Read more...]
