How do you handle customer dissatisfaction and am I liable?

[1qaz9106]

What is the name of your state? New York City

I work as an insurance broker in New York. Two months ago, I provided a general liability insurance quote for a customer. Over the course of those two months, I made 3 revisions to the quote changes sales and payroll, which ultimately led to its rejection by the underwriting team because they don’t want too many revisions. I tried creating new quote using same information but the system detected and declined new quote.

Unfortunately, when the customer wanted to bind the coverage, I was unable to provide it. I did manage to find an alternative carrier with a slightly higher premium. However, the customer is unhappy because he expected to receive the initial quote I had provided with a lower premium. He has expressed his intention to take legal action against both me and the insurance carrier.
The question is whether the customer has grounds to retain a lawyer and sue in this situation.

 

[adjusterjack]

The question is whether the customer has grounds to retain a lawyer and sue in this situation.

You must be a very naive insurance broker if you have to ask that question.

If he believes that he has been wronged by you there is nothing stopping him from filing a lawsuit.

Do you have Errors and Omissions insurance?

If you do, I strongly suggest you report the customer's threat to the E&O claims department, which is a requirement of your policy.

If you don't have E&O insurance, all you can do is sweat it out and if you get served with a lawsuit, hire a lawyer to defend you.

 

[quincy]

What is the name of your state? New York City

I work as an insurance broker in New York. Two months ago, I provided a general liability insurance quote for a customer. Over the course of those two months, I made 3 revisions to the quote changes sales and payroll, which ultimately led to its rejection by the underwriting team because they don’t want too many revisions. I tried creating new quote using same information but the system detected and declined new quote.

Unfortunately, when the customer wanted to bind the coverage, I was unable to provide it. I did manage to find an alternative carrier with a slightly higher premium. However, the customer is unhappy because he expected to receive the initial quote I had provided with a lower premium. He has expressed his intention to take legal action against both me and the insurance carrier.
The question is whether the customer has grounds to retain a lawyer and sue in this situation.

Did your initial quote state that it was an initial quote subject to revisions?

What prompted all of the revisions?

A customer can always sue, whether a suit has merit or not. If the customer does sue, you will have to respond. Threats to sue, however, are common. Less common would be someone following through with the threat.

 

[Taxing Matters]

The same thing with threats to file bankruptcy. A lot of people threaten their creditors with that to buy time thinking it will make the creditor back off. For any experienced creditor that threat will be ignored and collection will continue until the creditor recieves notice of the bankruptcy. While many make that threat, a lot of them do not actually go through with it.

These kinds of threats in most cases should not alter your future plans (unless you discover that you've not been in compliance with the law, in which case you want to correct that going forward) based on those threats. Either they'll do it or not. If they do, just be ready to respond. If they don't, then you didn't have anything to worry about. Your life will be more stress free if you don't worry about things over which you have no control and that you don't know for sure will happen.

 

[quincy]

The same thing with threats to file bankruptcy. A lot of people threaten their creditors with that to buy time thinking it will make the creditor back off. For any experienced creditor that threat will be ignored and collection will continue until the creditor recieves notice of the bankruptcy. While many make that threat, a lot of them do not actually go through with it.

These kinds of threats in most cases should not alter your future plans (unless you discover that you've not been in compliance with the law, in which case you want to correct that going forward) based on those threats. Either they'll do it or not. If they do, just be ready to respond. If they don't, then you didn't have anything to worry about. Your life will be more stress free if you don't worry about things over which you have no control and that you don't know for sure will happen.

A threat to sue becomes a more worrisome threat when it comes in a letter from an attorney, on attorney letterhead, and is written on behalf of a client.

 

[1qaz9106]

You must be a very naive insurance broker if you have to ask that question.

If he believes that he has been wronged by you there is nothing stopping him from filing a lawsuit.

Do you have Errors and Omissions insurance?

If you do, I strongly suggest you report the customer's threat to the E&O claims department, which is a requirement of your policy.

If you don't have E&O insurance, all you can do is sweat it out and if you get served with a lawsuit, hire a lawyer to defend you.

if he does sue me and insurance carrier what will be m

Did your initial quote state that it was an initial quote subject to revisions?

What prompted all of the revisions?

A customer can always sue, whether a suit has merit or not. If the customer does sue, you will have to respond. Threats to sue, however, are common. Less common would be someone following through with the threat.

I did not tell insured it was an initial quote and subject to revision because he wanted to buy it, but I did not know it expires every 10 days, usually quote is good for 30 days for most companies.

the insurance quote expires every 10 days, so I needed to create new quote each time after 10 days. I forgot what number I put down in the previous quote so this resulted different number for sale and payroll.

If he does sue, what he could get out from the lawsuit, the lawyer expect my E&O coverage to pay what amount $ for this type of situation.

 

[adjusterjack]

The advice given by Quincy and TM is the same advice that I would normally give.

However, things are different in the insurance industry. Agent's and Broker's Professional Liability/Errors and Omissions insurance is ubiquitous and a must have for agents and brokers.

The poster's E&O insurance requires notice to the insurer of knowledge of a potential claim.

If he does sue, what he could get out from the lawsuit, the lawyer expect my E&O coverage to pay what amount $ for this type of situation.

No idea.

Report the claim to the E&O carrier and give the claim rep the opportunity to investigate and determine if anything is payable at all.

You have that policy for your protection. Don't risk losing it by not complying with the notice requirements.

 

[Taxing Matters]

A threat to sue becomes a more worrisome threat when it comes in a letter from an attorney, on attorney letterhead, and is written on behalf of a client.

That's true, and helps us lawyers get some extra business. But lawyers are more constrained by the law and rules of practice in what threats to sue they may make and when. Without going into the details, a lawyer should not threaten action that at the time the threat is made the lawyer knows he/she will not take. That's especially true for lawyers who collect consumer debts, which are governed by the federal Fair Debt Collection Practices Act (FDCPA). In addition, the fact that the client had to pay money for that letter lends a bit more weight to the threat.

Customers, debtors, etc are themselves not limited by such rules and thus more readily spout claims (sometimes outrageous or clearly bogus ones) to sue. It's an easy thing to do, costs nothing, and they hope it works.