Consumer Law, Warranties Insurance Contract

[riskman2004]

As an insurance broker, I should've handled differently but hindsight is perfect vision. My situation:

On 1/27/04, I asked one of my fellow co-workers who handles personal auto and home insurance to quote my auto coverage. She did, and I asked her to bind coverage effective that day. She said ok and I informed her that I would pay the down the following Monday ( about 5 days later, which was within our scope of binding authority ). On 2/2/04, my wife had a small auto accident with no bodily injury, just property damage to both vehicles. I called my office and spoke to the girl who was to have bound coverage. She said that she had forgotten, but would bind coverage then. I told her that was unacceptable and that we needed to speak to the owner of the firm as there was now a potential errors & omission situation and I would not hesitate to use that means to get coverage that was supposed to have been bound. It is not 5/17/04 and I still have a damaged vehicle, the insurance company is investigating as they think we are trying to pull a "fast one" on them.

Should I pursue under E&O? The owner, now my "former" employer has basically said that since I didn't pay the down then there was no coverage. However on 2/2 when I actually came in the office, they bound coverage and I didn't pay a down payment until 2/7. It is common practice to afford a client a few days after binding coverage to get the paperwork signed and the money exchanged. Once you have told the client that coverage is bound, are you not legally on the hook to provide coveage even if it ended up being an E&O lawsuit?

What avenues, previous court cases should I use to get this settled?

Thanks,
Jeff Bryant

 

[Michael Wechsler]

I If the girl forgot to bind the policy I'm not sure what you can do. That is something you should make sure happens and you probably should have checked back with her shortly thereafter. My understanding is that if the policy was bound then both the insured and the insurer have a binding agreement. How that deals with the accident of 2/2 will be dealt with per your contract and I don't know whether they will be liable for something that happened prior to the binding of the contract. That is another issue but as far as being bound, it would seem that this is possible and practice in the insurance industry, which I have limited familiarity.

I would make sure that "bind" means a legally binding agreement and not a loose term used to describe a process.

Originally posted by riskman2004
As an insurance broker, I should've handled differently but hindsight is perfect vision. My situation:

On 1/27/04, I asked one of my fellow co-workers who handles personal auto and home insurance to quote my auto coverage. She did, and I asked her to bind coverage effective that day. She said ok and I informed her that I would pay the down the following Monday ( about 5 days later, which was within our scope of binding authority ). On 2/2/04, my wife had a small auto accident with no bodily injury, just property damage to both vehicles. I called my office and spoke to the girl who was to have bound coverage. She said that she had forgotten, but would bind coverage then. I told her that was unacceptable and that we needed to speak to the owner of the firm as there was now a potential errors & omission situation and I would not hesitate to use that means to get coverage that was supposed to have been bound. It is not 5/17/04 and I still have a damaged vehicle, the insurance company is investigating as they think we are trying to pull a "fast one" on them.

Should I pursue under E&O? The owner, now my "former" employer has basically said that since I didn't pay the down then there was no coverage. However on 2/2 when I actually came in the office, they bound coverage and I didn't pay a down payment until 2/7. It is common practice to afford a client a few days after binding coverage to get the paperwork signed and the money exchanged. Once you have told the client that coverage is bound, are you not legally on the hook to provide coveage even if it ended up being an E&O lawsuit?

What avenues, previous court cases should I use to get this settled?

Thanks,
Jeff Bryant