Melbourne, Florida · Serving clients statewide

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Michael P. Sapourn, JD, CIC, CRM
Agency Practices

Agent Communications with Clients and Insurers

The short answer

Insurance agents owe duties to both the companies they represent and the clients they serve. Coloring an application to help a client, or glossing over exclusions in a proposal, can create misrepresentation defenses and E&O exposure. Michael Sapourn testifies on the communications standard agents are expected to meet.

Straddling the fence

Most insurance agents serve two parties. They have a duty to their insurers to honor the agency agreement, follow underwriting guidelines and stay within their binding authority, and to report claims accurately and promptly. They also owe duties to their clients and, when they assume the duty to advise, are expected to advise on the types and amounts of coverage and help with claims.

Agents get into trouble when they pick sides. Coloring an application or a claim report to benefit a client undermines the agent’s credibility with the company. Glossing over exclusions and limitations in a proposal can expose the agent to an E&O claim.

Integrity on both sides

Quality agents communicate honestly with both. Accurate representations to underwriters defeat later misrepresentation defenses that might otherwise be blamed on the agent. Written disclosure of a proposal’s advantages and limitations avoids claims that the customer was misled.

Mr. Sapourn managed that balance for his entire agency career, and in 23 years as a principal he knows of no E&O claim filed against him or his agency. He has testified on agent-prepared applications containing misrepresentations and on insurers’ attempts to void policies for alleged misrepresentation.

Mr. Sapourn is retained by both plaintiff and defense counsel for case analysis, opinion reports, affidavits, depositions and trial testimony. Request his CV and Rule 26 disclosure through the contact form.

Frequently asked questions

How can an agent's application create a coverage problem?

If an application contains material misrepresentations, the insurer may deny a claim or void the policy. When the agent prepared or colored the application, the agent may be exposed to the client's claim.

Should agents put coverage limitations in writing?

Yes. Disclosing both the advantages and the limitations of a proposal in writing protects the client and helps defeat a later claim that the client was given the wrong impression.

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