As an agent, you have a duty to act conscientiously towards your carriers. As brokers, you must comply with your agreements with your carriers. Failure to do so could result in your errors and omissions (E&O) carrier or the insured’s carrier seeking compensation from you.
Common Wording of Agent’s Duty to Report
Producer agreements with insurers require reporting. Here is an example from one contract under the list of producer responsibilities: “To forward to us immediately any written notice you receive of any policyholder complaint, claim, suit, or proceeding against us and not respond on our behalf to any such complaint, claim, suit, or proceeding.”
According to one risk management expert, agents should also consider the Unfair Claims Practices Acts of various states and the National Association of Insurance Commissioners’ protocols. “These regulations dictate claim handling protocols for the insurer. If the producer fails to relay the incident—even if it is not yet a ‘claim’ but a ‘potential claim’—the producer may be obstructive and subject to an E&O claim, potentially violating its contractual responsibilities to upstream insurers and wholesalers.”
E&O: Your Insurance Carrier & Retained Attorney Recommend Hiring an Expert Witness
It is common for an insurance carrier and the attorney retained by an insurance agency to recommend hiring an expert witness, particularly in complex or highly technical cases. The insurance carrier typically assesses the need for an expert witness based on the complexity of the claim and the potential financial exposure. The attorney focuses on the legal strategy and the admissibility of the expert’s testimony. Here’s a typical outline of the process:
Recommendations from Your Insurance Carrier:
- Claims Evaluation:
- Complex Claims: When a claim involves complicated issues or significant financial exposure, the insurance carrier conducts a comprehensive evaluation and may recommend an expert witness for a thorough assessment, ensuring all aspects are covered.
-
- Dispute Resolution: In disputed claims, the impartial and authoritative opinion of an expert witness plays a crucial role in resolving the matter, underscoring their significance.
- Risk Management:
- Industry Standards: An expert witness can help determine whether the actions taken by the insurance agency or the insured party met industry standards and best practices.
- Regulatory Compliance: Ensuring all actions comply with relevant regulations can be critical, especially in contested cases.
Recommendations from Your Retained Attorney:
- Legal Strategy:
-
- Strengthening the Case: An attorney may recommend an expert witness to bolster the case by providing specialized knowledge and authoritative testimony.
-
- Clarifying Technical Issues: Expert witnesses can explain complex technical or industry-specific issues for the court, helping the judge and jury understand the nuances of the case.
- Testimony and Evidence:
- Admissible Testimony: Attorneys are familiar with the rules of evidence and can recommend expert witnesses likely to be deemed admissible by the court.
-
- Supporting Arguments: Expert witnesses can provide detailed reports and testimony that support the attorney’s legal arguments.
Coordination Between Insurance Carrier and Attorney:
- Joint Decision-Making: The insurance carrier and the attorney often collaborate to identify the need for an expert witness and to select a qualified candidate.
- Budget Considerations: The insurance carrier may have a budget for expert witness fees, and the attorney can help manage these costs effectively.
- Strategic Alignment: It is crucial to ensure that the expert witness’s testimony aligns with the overall legal strategy, which requires coordination between the carrier, the attorney, and the expert witness.
Process for Hiring an Expert Witness:
- Assessment: The insurance carrier and attorney assess the case and determine the expertise needed.
- Search and Evaluation: They search for and evaluate potential expert witnesses, considering credentials, experience, and previous testimony.
- Engagement: Once a suitable expert witness is identified, the carrier and attorney negotiate terms and formally engage the expert.
- Preparation: The expert witness is provided with all relevant case materials and briefed on the case strategy.
- Collaboration: The expert works closely with the attorney to prepare reports, depositions, and court testimony.
In summary, the recommendation to hire an expert witness typically comes from the insurance carrier and the retained attorney, as they work together to strengthen the case and ensure the best possible outcome.
Hiring an expert witness is a crucial step in handling complex or technical insurance-related cases. Insurance carriers suggest this approach for comprehensive claims evaluation and dispute resolution, as expert witnesses provide impartial and detailed assessments. They assist in risk management by identifying potential risks, suggesting preventive measures, and ensuring that actions taken meet industry standards and comply with relevant regulations.
Attorneys recommend expert witnesses to bolster the legal strategy by offering specialized knowledge and clarifying technical issues for the court. They also ensure the expert’s testimony is admissible and supports the legal arguments. By providing detailed reports and authoritative testimony, expert witnesses play a crucial role in making complex issues understandable for judges and juries, strengthening the case and instilling confidence in the legal process.
Coordination between the insurance carrier and the attorney is not just necessary; it’s essential for successfully hiring an expert witness. This joint decision-making process involves assessing the need, searching for and evaluating potential candidates, negotiating terms, and preparing the expert witness for collaboration throughout the case. Managing the budget for expert witness fees and aligning the expert’s testimony with the overall legal strategy are also key considerations. This collaborative approach ensures that everyone is part of the decision-making process, fostering a sense of inclusion and shared responsibility.
The combined expertise of the insurance carrier and the retained attorney is instrumental in ensuring the selection of a credible and authoritative expert witness. This collaborative approach not only strengthens the case but also helps achieve a favorable outcome by clarifying complex issues and supporting strategic legal arguments. The expert witness’s role is integral in providing clarity and support, thereby enhancing the legal position of the insurance agency.
If you would have additional E&O questions or coverage questions, you can contact Ashley Riley at ashleyr@ohioinsuranceagents.com or call direct: (614)-552-3052 or toll-free: 800-555-2742
NOTICE: The Ohio Insurance Agents Association, Inc. (OIA) provides this information with the express understanding that 1) no attorney-client relationship exists, 2) neither OIA nor its attorneys are engaged in providing legal advice and 3) that the information is of a general character. You should not rely on this information when dealing with personal or professional legal matters; rather, seek legal advice from retained legal counsel.
Legal Disclaimer: This material is intended to provide you with general background and insight. The material does not constitute, and should not be regarded as, legal advice regarding any particular facts, circumstances, or issues. This material is not intended to serve as a substitute for legal counsel, and we advise you to contact legal counsel for specific analysis, drafting and advice.
Cited Resources
https://www.supremecourt.ohio.gov
https://www.supremecourt.ohio.gov/docs/LegalResources/Rules/civil/CivilProcedure.pdf
Ohio Rule 702
https://www.supremecourt.ohio.gov/docs/LegalResources/Rules/evidence/evidence.pdf
Ohio Rule 703- 706
https://www.supremecourt.ohio.gov/docs/LegalResources/Rules/evidence/evidence.pdf
Insurance Expert Witness
GLG Law
https://glginsights.com/articles/insurance-expert-witness/
The American Association of Insurance Management Consultants (AAIMCO)
Jurispro Expert Witness , Where Attorneys look to find experts , Expert Witness FAQs
