In addition to pursuing claims for insurance coverage for Coronavirus related damages, policyholders may also assert claims against their agents and brokers for failing to advise of this risk in the operation of their business and/or for failing to obtain coverage on behalf of the policyholder consistent with the directives of the policyholder.
While both insurers and insureds may struggle with answering questions surrounding the availability of insurance coverage for pandemic-related losses, insurance agents and brokers should be prepared to face a myriad of questions – and possible liability claims in the months and years to come. In these uncertain times, brokers will play a key role in answering customer’s questions regarding the insurance market, the impact of Coronavirus, and search the market for products that meet their demands and needs. Indeed, brokers are often the first line when insureds are looking to maximize the protections afforded under their insurance program.
Best practices for agents and brokers in these uncertain times includes acting with honesty and integrity in the client’s best interest. Provide reasonable assistance in submitting a claim and not advising clients on matters that the insurance professional lacks training or experience. Further, a broker should carry out a suitability assessment of the client’s objectives, circumstances, needs, and priorities before making any recommendations. Finally, a broker should disclose any association or affiliation with an insurer where the professional is recommending products of that insurer.
With these general best practices in mind, given the state of flux regarding coverage for COVID-19-related losses, it is important for customers to understand why certain coverage may be excluded or why a claim may not meet coverage guidelines. A broker should avoid responding to questions when they do not know the answer and, when necessary, engage with the insurer to determine the appropriate course of action. If there is any uncertainty regarding coverage for their customers, a broker should follow their established guidelines for submitting claims to the insurer. As always, it remains the insurer’s role to determine the scope of coverage. Finally, a broker should promptly and properly document all conversations with the customer as well as any conversations with the carrier for future reference.