The author regularly represents insurance agents and brokers in professional liability and related claims. In many years in handling such claims for broker and agents, including representing clients ranging from major brokers to small or one-person independent agents, the author has seen claims of all kinds and sizes. While every claim is by nature unique, there are patterns and themes that run through them. As an educational tool and aEURoewake-up call,aEUR? we discuss in this series the kinds of problems that intermediaries (whom we will refer to generically as aEURoebrokersaEUR?) face in handling matters for clients that tend to wind up in claims and ways in which brokers can avert claims, or at least minimize their impact when they are made.

One of the most common themes or patterns is a claim by the client that the broker did not procure a aEURoesufficientaEUR? or aEURoeproperaEUR? policy. This, in turn, often results from a dispute as to what the client requested or what the broker promised to provide. Disputes of this nature arise from a number of circumstances, among them the following (this list is not exhaustive by any means):

• The broker was asked by the client to obtain aEURoea policyaEUR? of some generic kind, and the broker did not press the client for specifics.

• The broker conducted all of his business on the phone or in person and did not create or preserve any writings that reflected the clientsaEUR(TM) request or the brokeraEUR(TM)s promise.

• The broker, in an effort to market his services, made representations (usually oral, but occasionally in writing) as to his ability, experience, or aEURoespecialtyaEUR? that he does not in reality possess.

• The broker did not sufficiently understand the clientaEUR(TM)s business to have a grasp of what the client really needed or what the client was requesting.

• The client and the broker had a long relationship in which the client, over time, came to rely more and more on the broker to procure the aEURoeproperaEUR? coverage for the client.

• The broker made some off-hand comment like aEURoeI will take care of youaEUR? or aEURoeI will get you the coverage you needaEUR? that seems general, but after a denied claim, tends to take on a disturbing character of a promise to procure a specific kind of coverage that the broker did not intend to promise.

The theme that runs through these kinds of claims is that the broker either did not make sure that he truly understood what the client wanted or needed, or he did not document the transaction so that he could establish what he was told and what he told the client. One of the more frustrating kinds of claims is the last one on the list; brokers, in an effort to instill confidence or simply to market themselves, make the kinds of comments that in other circumstances might be considered aEURoepuffingaEUR? but where the client claims that insufficient coverage was procured, appear ominously like guarantees or representations that the aEURoeproperaEUR? coverage aEUR" whatever that might be aEUR" was not procured.

Brokers must keep in mind that after an uncovered loss, most clients will look around for some source of recovery for the loss aEUR" and often, the person most visible is the broker. Thus, what would have been viewed without the claim as friendly conversation, promises of due diligence, or general statements relating to seeking business are often viewed after a claim as promises, representations or guarantees.

Brokers should understand that they operate in an industry that virtually by its very nature nurtures litigation. That, in fact, is one of the primary reasons that clients seek insurance. This litigation environment makes it easy for clients to consider litigation against friends and colleagues where the alternative is a loss aEUR" often a significant one for the client aEUR" that the client would otherwise have to pay himself. For this reason, it is not possible to avoid claims regardless how careful the broker is aEUR" such avoidance is often as much a matter of luck as care. However, brokers can certainly minimize the risks of a claim being made against them and maximize their ability to defeat such claims if made.

Brokers should understand that they operate in an industry that virtually by its very nature nurtures litigation. That, in fact, is one of the primary reasons that clients seek insurance. This litigation environment makes it easy for clients to consider litigation against friends and colleagues where the alternative is a loss aEUR" often a significant one for the client aEUR" that the client would otherwise have to pay himself. For this reason, it is not possible to avoid claims regardless how careful the broker is aEUR" such avoidance is often as much a matter of luck as care. However, brokers can certainly minimize the risks of a claim being made against them and maximize their ability to defeat such claims if made.