Insurance agents and brokers often are asked to change insurance policies to comply with the requirements of a lease or some other type of contract. The case that follows, Heaven & Earth Inc., et al v. Ross Nesbit Agencies Inc., D/B/A Paulet/Slater, Inc., et al, No. A10-1109 (Minn.App. 01/11/2011), establishes the hazard when an agent or broker represents more than one party interested in the insurance policy. In this case, the Ross Nesbit Agencies (Ross Nesbit) represented one party with regard to the insurance of a building it rented from a second party who the agency also represented. The court pointed out that the error made by the agent was to amend a policy for a named insured at the request of the landlord without the knowledge of or permission of the named insured.
Read Barry Zalma's previous column, "Insureds can't force more coverage."
Although Ross Nesbit obtained summary judgment in a tort action in which Heaven & Earth Inc. (H&E) claimed that Ross Nesbit and the insurance agent, by amending H&E's policy to add its landlord as a loss payee without its knowledge or permission, the action started a chain of events that led to the loss of H&E's business. The judgment did not last and was sent back to the trial court to have a jury determine the effect of the agent's actions.
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