An insurance agent or broker taking over the servicing of a policy from another agent or broker on an agent or broker of record letter should read the contract carefully before taking on the work. The Benefit Options case teaches that an agent or broker who does not read an agreement or have his lawyer read the agreement before taking on work will find himself working for free with no recourse.
When Benefits Options Agency took over a program for the city of Chillicothe, Ohio ("the City"), the agency thought it would get a part of the commission paid by the City's insurer to the original broker. If the agency had read the contract, it would have known that the commission was fully earned by the original broker and the insurer had no obligation to pay a commission to Benefits Options Agency. Had he agency understood the contract, it would have avoided an unnecessary and expensive lawsuit and would have negotiated with the City for payment of fees for service.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
