Under what circumstances can an insurance professional be held liable for negligence?

An insurance professional can be held liable for negligence if they fail to act with reasonable care, leading to a client’s loss. This principle revolves around the legal standard known as the “reasonable person” standard, which assesses whether the individual in question acted in a manner that a prudent person would have in similar circumstances. If the insurance professional does not meet this standard of care—such as by providing incomplete information, failing to disclose significant risks, or making errors in judgment—they can be deemed negligent.

Liability arises specifically when this lack of diligence directly causes financial harm or loss to the client. The responsibility for ensuring thorough and accurate advice is a core component of the professional standards expected in the insurance field, highlighting the importance of operating with a high level of care and competence.

Other options do not contribute to liability for negligence. Being unaware of regulations does not absolve an insurance professional from responsibility; following company policy does not equate to an automatic defense against claims of negligence; and being under management pressure might provide context for actions taken, but it does not excuse a lack of due care that leads to client losses.