Your insurance coverage shouldn’t be like a black box: you pay money in one end and you hope something good comes out the other end, but you really have no idea what’s inside. Isn’t that what an insurance transaction is like? Your proposal is 5 pages but your ultimate policy contract is 200. Isn’t that a bit like magic? And then if you have a claim, it’s a hope and a prayer that it is covered – claim time is when the absurdity may become obvious!
Your broker knows what is in the policy, though. right? Unfortunately that’s not your broker’s job. Understanding the terms of your insurance policy is legally your own obligation. In fact see the disclaimer in the proposal issued by one of the major multi-national brokerage firms:
“The final decisions are yours. We will procure the coverage chosen by you. You will advise us of any provision not in accordance with your instructions…and any review you may seek from …outside consultants is expected and essential.”
Do you get the sense your broker will be standing right by your side in a claim situation? They are not even expected to. See this from a broker E&O lawsuit:
“Moreover, like other insurance agents and brokers, the Defendants did not owe East Coast a duty to ensure that it understood the full import or meaning of the terms of the coverage provided.”
*Baldwin Crane Equipment Corp v. Riley & Riley Ins. Agency, Inc. 44 Mass. App.Ct.29,31-32 (1997).
In any event, legalities aside, is it reasonable to think a person in the sales business can really critique his or her own product (except in a superficial, for-show, manner).
Risk management involves full policy review and negotiation as part of the competitive process prior to binding of coverage. This would involve all the policy language including insuring agreement, exclusions, conditions and limitations. There are also traps in the application process, and we make sure you don’t make promises you don’t keep (“misrepresentations” in the world of the insurance company claim adjuster). you can see this is the only way to survive long term in the world of insurance. You need to know what you are covered for – business decisions yes…surprises no.
Have an expert on your side. We’re always on your team, working hard to make sure you have the right coverage. See how our risk review does this.
Education is when you read the fine print. Experience is what you get when you don’t. — Pete Seeger