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 statements setting forth the correct coverage amount, the Supreme Judicial Court affirmed the trial court’s finding that the plaintiff had relied on the oral misrepresentation. Further, it found that it was not unreasonable as a matter of law for the plaintiff to have done so.
Based on these misrepresentations, the Court affirmed a judgment against the agent for, among other things, misrepresentation, and including an award of punitive damages and attorney’s fees.
What Do Insurance Agents Need to Know?
This case underscores the need for insurance agents to use the utmost care to fully and accurately describe the policies being sold.
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