No implied contract of temporary insurance would arise, however, where limitations on an agent’s authority are conspicuously noted on the insurance application.įor example, in Linnastruth v. What constitutes “reasonable cause” includes, for example, inadequate or inappropriate coverage failure of the insured to meet financial standards failure of the insurance agent to provide written evidence of the agent’s authority to bind coverage and failure of the binder to comply with the specific formulistic requirements discussed above.Ī contract of temporary insurance also may arise from a written application for insurance and the payment of the first premium “if the language of the application would lead an ordinary lay person to conclude that coverage was immediate.” Ahern v. However, as is customary between the insurer and the insured, an oral binder may be effective - even if it does not contain all of the specifics set forth in the Insurance Code.Ī written binder, however, is preferable when dealing with third parties because Insurance Code Section 382.5(b) provides that if any party to a contract refuses, without reasonable cause, to accept the written binder as proof of insurance, he or she will be deemed to have breached the contract and the insured will be entitled to appropriate injunctive relief, damages for the breach and reasonable attorney’s fees and costs. Others prefer to communicate via email, telephone, or text messages.The primary purpose of this requirement appears to be to establish that such a writing will constitute satisfactory proof of insurance for an insured’s dealings with third parties.

Some business owners want lots of face-to-face interaction.

Can you meet my needs? Explain what types of services you are looking for and ask whether he or she can provide them.

Call the individuals and ask for their feedback.

Can you provide references? Ask the agent to provide the names and contact information for satisfied customers with businesses similar to yours.

What insurers do you represent? Find out what insurance companies the agent represents (or the broker deals with).

If you aren't familiar with the credentials, ask the agent for an explanation.

What credentials have you received? Many agents have attained insurance credentials like the Chartered Property and Casualty Underwriter (CPCU) or the Certified Insurance Counselor (CIC).

How long have you worked as an agent? Experience is important so choose an agent who's been in the business for several years.

An agent who handles mostly personal lines coverages is probably not the right choice for a business.

What types of insurance do you sell? The agent should offer the types of coverages your business needs.

Are you familiar with my industry? The agent should have at least a basic knowledge of your industry and type of business.

Issue insurance binder to broker