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Because insurance agents and brokers often are the firsts to receive notices of losses or claims, it is their responsibilities to immediately report those claims to the insurers. The California Dept. of Insurance requires brokers to immediately advise the insurer of the loss. But sometimes when the agent or broker fulfills the obligation, a claim falls through the cracks, such as in Fasuyi v. Permatex Inc. (167 Cal.App.4th 681, 84 Cal.Rptr.3d 351 [Cal.App. Dist.1 10/15/2008]). Although the insured, the insurer and the broker were protected by the court, the case teaches that the insurance agent or broker not only must provide immediate notice of the suit, but also must follow up with the insurer to ensure that responsive pleadings are filed in a timely fashion.
The California Court of Appeal in Fasuyi had to balance that the law favors resolution of cases on their merits with the need to protect the rule of law when a party fails to protect his or her rights.
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