Iowa Supreme Court OKs Insurance Agent's Failure to Advise

In an opinion issued today, the Iowa Supreme Court found that an insurance agent did not have an affirmative duty to advise his clients to consider workers compensation insurance for a self-employed over-the-road truck driver due to the limited relationship between the agent and the family.

The plaintiffs in the case, Timothy Merriam and his family, met with their insurance agent, Steven Stonehocker, to discuss procuring additional insurance on a second home. During their meeting, several other insurance needs were discussed, including life insurance for Mr. Merriam's mother and insurance for structures, animals, and guns. Mr. Stonehocker suggested they consider insuring their vehicles through his company and offered to get quotes for the various insurance policies discussed.

The insurance agent failed to advise that Mr. Merriam, a self-employed truck driver, purchase self-employment workers' compensation insurance. Mr. Merriam was subsequently injured on the job and did not have workers' compensation insurance.

Plaintiffs claimed that Mr. Stonehocker was aware of Mr. Merriam's and that his failure to advise or inquire about workers' comp breached his duty of care to act as a reasonably prudent insurance agent. The Iowa Supreme Court agreed with the district court that the insurance agent was not negligent in failing to advise about the workers' compensation insurance, as his relationship with the family was limited in scope and he did not represent he was assessing their overall insurance needs.

If you believe your family or your company has had losses due to negligent insurance advice, you may be able to pursue a claim. Contact an experienced business litigation attorney to discuss your insurance coverage claim by using our online contact form or calling (319) 866-9277.