20 Oct Sign Your Client’s Name to a Document – NO!
As we go through life, we often remember some events or situations much more vividly than others. For me, one of those involved my early days as a CSR in an insurance agency in Utica, New York (I handled S-Z for commercial, personal and claims). As a newbie CSR, I was asked by one of the agency’s seasoned producers to sign a client’s name to a document. The producer had delivered the policy to the client (a restaurant) a couple of weeks prior. The restaurant owner had decided to move his insurance coverage. The request for the client to return the policy was ignored and thus the producer asked me to sign the client’s name on a lost policy release form.
What did I do? Assuming that this was the norm in the insurance business, I signed the client’s name on the lost policy release and sent it in to the carrier. Fortunately, nothing happened or my insurance career would have definitely taken a different direction. Let’s look at what could have happened.
When the lost policy release was processed, it essentially removed the carrier from having any obligation to provide any coverage. If the restaurant had suffered a loss, the carrier would have denied the coverage. What if the restaurant owner changed their mind and wanted the coverage to remain in effect or possibly, the producer misunderstood the intent of the client? There is a good chance that an E&O claim against the agency would have been made. During the subsequent discovery of the details, my signing the client’s name to a lost policy release would certainly have surfaced. Bottom line, this would not have had a good ending.
Why do I bring up this issue? Because the issue involving signing a client’s name is still happening – and in fact, a claims story with a somewhat similar fact pattern (that claim involved the agency signing the client’s name to an application) was included in one of the E&O Plus’ quarterly webinars. That claim did not have a good ending either.
Signing a client’s name is dangerous because insurance documents requiring client signatures typically have a provision stating the client is verifying the contents are true and accurate.
I have had many agencies advise me that that the client told them to go ahead and sign their name. This led the agency to believe that everything was OK. I can promise you that after a problem develops, the client will change their story and emphatically deny they ever gave you that authority.
In addition, signing someone else’s name to a document verifying the accuracy of the information contained in the document exposes one to liability and is, in many states, prohibited by law with the potential for revocation or suspension of your insurance license.
If an E&O claim develops, without a doubt, a jury will not look favorably on an agent that took advantage of the client by forging a signature. In many E&O matters, a handwriting expert has been brought in and this has been the deciding factor in returning a verdict for the client. Many agencies will be adamant that this could never happen in their agency. Are they 100 percent sure? Maybe this should be a topic at a future sales / producer meeting.
I can still remember the issue occurring – maybe I should go get some therapy.