When a suit is filed against an insured, the wording of every liability insurance policy requires the insured to report that suit to the insurer in writing. Most insurers find a notice made orally to the company or the agent sufficient because the agent or broker will convert the oral report from the client to a written ACORD Notice of Loss and immediately deliver the notice to the insurer. Most insureds do not know how to give notice to their insurers and will call their agents or brokers, describe the losses or deliver copies of the suits and expect the agents or brokers to pass the notice to the insurers.
Insurance agents and brokers take on the obligation to pass on a notice of claim or suit received from the agent or broker's client to the appropriate insurer.
States have begun to issue regulations that require the agent or broker, upon receiving communication from an insured client regarding a claim, furnish the client with a complete response based on the facts as known by the agent or broker. This includes advising the insurer of the claim's existence.
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