When an agent or broker is sued in an errors & omissions claim and lawsuit, the allegation might be related to disclosure, a contractual issue or a variety of other circumstances. Many agents and brokers have heard me say, though, that the Plaintiff attorney will try every legal avenue available to determine liability on the part of the Claimant (you), regardless of what you may have done or did not, do. “How can I sue you? Let me count the ways”.
This type of circumstance came clearly to light today, when I received a new insurance application (not a NextHomie), in which the Broker applicant was being sued. The Plaintiffs complained that the real estate brokerage and its’ representatives engaged in misrepresentation of the price of the home and any undisclosed potential interest they had in the property. Serious allegations which may or may not be true as the case is still in motion. However, here is what the Plaintiff’s sued for:
- Fraud, Conversion, Breach of Fiduciary Duty, Breach of Contact, Breach of Implied Convenance of Good Faith and Fair Dealing, Accounting, Claim and Delivery, Constructive Trust, Conspiracy, Unfair Competition and Request for Declaratory and Injunctive Relief.
That is a lot of accusations, and one can only imagine the months of anguish, time and expense that the Claimant (and their insurance carrier) will endure in trying to defend against these allegations. What’s my point, you might ask? It is this: when a plaintiff and their legal team comes after you, it will be with all barrels loaded. Prevention, risk management, sound business practices and clear expectations and communications, executed daily in your firm and in your practice, will greatly reduce your risk of being sued. If the worst happens, and you do become that Claimant, then the purposeful and documented efforts that you can demonstrate as your effort to do things the right way, will be your best defense to an early and positive resolution.
For more helpful information from our partners at Landy Insurance, click here.
