I do not need to read how the number of cases lodged against brokers for professional negligence or malpractice is growing, although I have read such stories. I see this reality as I speak to brokers across the country. I am always asked the following question: How do I protect myself against being sued for not providing information on an issue that I felt was outside the scope of my engagement with the client?
This question usually follows a story about the broker who was successfully sued for failing to advise the client about some esoteric tax liability that the client incurred after implementing a new insured benefit program, or the broker who was sued for failing to consult with the client about a legal issue that was triggered by the type of coverage placed with the client. My response to the question whether its asked in Ohio, New York, Florida, Georgia, California, Virginia or any of the other states I have visited is always the same. Enter into an engagement letter with your client.
