11/10/2020 – After his old business interruption insurance was about to expire, a freelance advertising specialist took out new insurance through a multiple agent. He was not told that there was a waiting period. When he became seriously ill shortly afterwards, the insurer refused to pay. The ORF citizens’ attorney was mainly concerned with the question of whether the agency or the insurer is liable for the advisory error.
Because his previous business interruption insurance expired at the end of February 2020, a self-employed advertising specialist wanted to take out new insurance. He turned to his insurance agent and received several offers with different waiting periods.
He chose a slightly more expensive variant of the alliance, where he should receive money from the eighth day of a business interruption, as he said in the ORF program “Bürgeranwalt”. The agent did not tell him that there was a three-month waiting period for the new insurance.
If he had known that there was such a waiting period, he would have intervened: “I don’t want that, it is very risky.” He therefore feels that he is “inadequately advised”.
In fact, a short time later a rare muscle disease developed: he has problems lifting and holding his left arm, the muscles are weak, he has sensory disorders and nerve pain. In his job as an advertising specialist, he is unable to work.
Multiple agent: Increased standard of care
Because the insurance company refused a service with reference to the waiting time, the policyholder turned to the lawyer Elfriede Hutegger.
The ORF explains to the ORF that there is a consultation protocol that has been signed by the policyholder. On page six of this you will find the word “waiting time” in small print without any further explanation.
The lawyer recognizes a failure of the then employee of a multiple agency in one place in the state of Salzburg. A multiple agent is “legally to be considered like a broker”, for him a higher standard of care would apply, so Hutegger.
The multiple agent was “to be qualified as an expert, so to speak”, and personal liability for his actions was “possibly possible”. So far, the alliance has refused a service. If it does not come to an out-of-court solution, Hutegger wants to sue.
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Insurer: benefit case falls within waiting period
In addition to the lawyer, Alexander Punzl, President of the Austrian Insurance Brokerage Association, was also present in the ORF studio; the policyholder was connected via video. The alliance sent a written statement from which presenter Peter Resetarits quoted.
Accordingly, on “14. February the corresponding application signed. The policy with the start date March 1st, 2020 was then sent to our customer and the insurance agency through which the contract was brokered. “
According to the insurance contract, a three-month waiting period has been agreed, so benefits can only be claimed after three months. A waiting period is common practice and should prevent any abuse, says the letter quoted by the ORF.
Allianz also writes: “Our customer reported a claim on May 1st of this year – it falls into the waiting period. We therefore ask for your understanding that we cannot provide any service with this either. “
The waiting period could have been avoided
The policyholder confirmed that there was only talk of the seven-day waiting period during the consultations, but not of a waiting period. And attorney Hutegger emphasizes that the application only speaks of a waiting period in the small print.
The word waiting period is only used “succinctly”, but it does not describe how long it lasts. And “you won’t find any of this in the policy itself”.
The policyholder went to the insurance agency in November 2019 with the “clear and unambiguous order” to take out a new business interruption insurance policy, whereby the transition had to be seamless. The lawyer: “He said that.”
There were two options for doing this: either signing a new contract from December 1st or canceling the waiting period. In any case, it is the responsibility of the insurance agent to inform the policyholder accordingly.
Multiple agency: who is liable?
A multiple agent is “unique in Austria,” said Punzl. From his point of view, the legal situation is “completely unclear” and there is no judicature. Since in this case the contract was concluded with Allianz, in his opinion the insurance company would have to be liable for its agent.
The alliance, on the other hand, stated that “this contract was not processed by an employee of the alliance but by a multiple agent,” Resetarits quoted from the letter. Multiple agents are independent and act independently, according to Allianz.
In this context, Punzl also pointed out that most errors occur when insurance contracts are re-covered, “because precisely such things are forgotten”. That is why “we as brokers are taught, we have to take care of that”.
Agency informed liability insurers
Punzl, too, “basically did not discover anything about a waiting period” in the application. And the policyholder stated that the insurance conditions had only been sent to him in June; he had not received a product information sheet.
The agency’s managing director informed his liability insurer about the case on October 7; Resetarits reported that he and his lawyer Hutegger have now announced the claim number.
According to the lawyer, this information to the liability insurer is the result of a letter that she sent to the agency. In it she stated that she was of the opinion that the insurance company was liable because she had used an agency “as a vicarious agent, so to speak”.
In this letter to the agency, however, she took the position that “the agency or the agent himself may also be personally liable”.
Agent as vicarious agent?
The result of her extrajudicial activity so far is “that responsibility is shifted back and forth between those involved,” said Hutegger.
“The insurer says he is not responsible, the agency and the agent are not vicarious agents, so we don’t pay. And the agency or agent says I’m not liable anyway. “
Not common practice
When Allianz stated in its letter that a waiting period in business interruption insurance was common practice for freelancers, he had to clearly state that this was not the case, emphasized Punzl.
He inquired of his six insurance partners, with four of them there is no waiting time at all, with the other two there is only one for mental illness. From his point of view, the agent chose the wrong product, said Punzl.
In view of this, attorney Hutegger said that her client should have been clarified “all the more”. And for the policyholder himself, an out-of-court solution “in any case” would be desirable.
Further information
The program is still available for a few days in the ORF TVthek. The section with the described case is below this link can be reached directly.
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