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Thread: broker neglect

  1. #1
    Captain Bob is offline Junior Member
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    broker neglect

    In March the diner that we owned for several years in upstate New York was destroyed as a result of a fire. We retained the same insurance broker throughout these years. Although the loss was determined as a total loss it turned out that the amount of insurance would only cover one half the cost of rebuilding the diner. In that own insurance broker never notified us verbally or in writing that we were under insured and recommended if not required us to increase our coverage can the broker be held accountable for neglect?
  2. #2
    philsfan01 is offline Junior Member
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    Quote Originally Posted by Captain Bob View Post
    In March the diner that we owned for several years in upstate New York was destroyed as a result of a fire. We retained the same insurance broker throughout these years. Although the loss was determined as a total loss it turned out that the amount of insurance would only cover one half the cost of rebuilding the diner. In that own insurance broker never notified us verbally or in writing that we were under insured and recommended if not required us to increase our coverage can the broker be held accountable for neglect?
    Insurance agents can be held liable when a property is underinsured. You can file a claim against your agent's E & O policy. We had a bunch of these types of claims in my area when wildfires destroyed a lot of homes surrounding my city.

    Whatever payment you do receive from your own insurance carrier may also be subject to a coinsurance penalty for not carrying adequate insurance on the property. For example, if your policy has an 80% coinsurance clause, the carrier will only reimburse you for up to 80% of the policy limit. I'm going to assume your property was not inspected by your agent or the carrier, otherwise you would have been advised to carry a much higher limit.
  3. #3
    Insbroker is offline Junior Member
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    I disagree with Philsfan for two reasons. I'm not an attorney but....First, YOU are responsible for determining the insured value. Second, unless this was overturned, there was a court case in NY and a precedent was set by the New York Court of Appeals, the state's highest court, which held that insurance brokers are not professionals (Chase Scientific Research Inc. v. NIANIA National Institute on Aging (NIH) and stated "Insureds are in a better position to know their personal assets and abilities to protect themselves more so than general insurance agents or brokers."
    Last edited by Insbroker; 09-24-2010 at 04:32 PM.
  4. #4
    justalayman is offline Senior Member
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    why was it under-insured?

    Was the policy amount adequate at the time of original purchase?

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