Towson, MD — A recent jury award of $500,000 in Anne Arundel County Circuit Court underscores the serious consequences of insurance agent malpractice and the importance of ensuring that auto insurance policies are properly structured to protect clients—especially when policyholders are self-employed or operating under business coverage.
The case involved a pedestrian, Jeffrey Beahm, who suffered serious injuries after being struck by an underinsured driver. Although Beahm had an active commercial auto policy, his insurance claim was denied—because his agent failed to list him personally as a named insured after converting his personal policy to a business one. The insurer argued that because the vehicles were titled in the company’s name, and not Beahm’s, he was not covered under the revised policy.
A jury found that the insurance agent failed to exercise reasonable care, awarding:
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$76,000 for past medical bills
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$424,000 in noneconomic damages
The verdict demonstrates how technical errors or oversights in policy drafting can leave individuals and businesses uninsured at the moment they need coverage most.
The Legal Standard: Maryland Law on Insurance Agent Negligence
Maryland courts have long recognized that insurance brokers and agents owe a duty of care to their clients—not only to execute transactions, but also to advise them appropriately and secure the coverage they reasonably expect.
In Int’l Bhd. of Teamsters v. Willis Corroon Corp., the Maryland Court of Appeals established a key principle:
“When an insurance broker is employed to obtain a policy that covers certain risks and the broker fails to do so—and fails to inform the client—liability may lie in contract or tort.”
The court emphasized that clients are entitled to rely on an agent’s expertise, particularly when the language or structure of the policy is complex or unfamiliar.
Common Coverage Disputes and Agent Malpractice Scenarios
At Smith, Gildea & Schmidt, we are uniquely qualified to assist clients navigating disputes related to:
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Conversion of personal auto policies to business or commercial policies
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Denied claims involving uninsured or underinsured motorist coverage
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Insurance policies where the named insured was omitted or incorrectly listed
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Business owners and contractors denied coverage due to misclassified risks or vehicles
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Failure to recommend a non-owner policy or similar alternatives
These types of issues often emerge after an accident—when it’s too late to fix a flawed policy—and may result in significant uncovered losses.
Contact SGS for a Consultation
If your insurance claim was denied and you suspect an agent’s oversight, incomplete advice, or misrepresentation may be to blame, you may have a claim under Maryland law.