Agent Held Responsible for Underinsurance

Originally published by Denise Sze.

I have made it a point to blog about an insured’s responsibility when it comes to obtaining insurance policies and the right kind of coverage. In California, having the sole allegation that a broker or agent didn’t provide the right policy when an insured didn’t read the policy is usually a losing argument for liability upon the broker or agent.

A California ruling from August 2013, finding broker liability shows that hope still springs for the underinsured who truly should have been informed of underinsurance and coverage issues by their agent. In Early v Smith-Kandal Insurance Agency, a historic hotel was destroyed by fire in March of 2007. The existing Chubb insurance policy of $3.1M didn’t cover the damages and the cost of rebuild. In the insured’s pursuit of a lawsuit for the underinsurance, the insured was able to show that before the last renewal of insurance that Chubb sent out a representative to inspect the property. That inspection resulted in…

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