Here is something almost any insurance law attorney can tell you:
One of the most common bases for an insurance dispute is the complaint that someone misrepresented something. After a claim arises, the insured may feel that the coverage accepted by the insurer is less than the coverage promised at the time of sale. Depending on the facts of the case, a representation by the insurer or its agent may lead to liability for breach of contract, unfair insurance practices, deceptive trade practices, negligence, or fraud.
In the 2003, 14th Court of Appeals opinion, Vecellio Insurance Agency, Inc. v. Vanguard Underwriters Ins. Co., an insurer had an indemnity cause of action against one of its agents if the agent’s conduct resulted in vicarious liability for the insurer. Further, in the 2002, 14th Court of Appeals opinion, Omni Metals, Inc. v. Poe & Brown of Texas, Inc., it was found by the court that an agent may be held liable for misrepresentation in the case of a bailee liability policy even where the insured failed to read the coverage, where the jury could find that the insurer and the agent misrepresented the extent of coverage under the policy. The 2003, Austin Court of Appeals opinion, New York Life Ins. Co. v. Miller, sets out what constitutes negligent misrepresentation.
It should be noted, however, that when insurance benefits are received under an employee benefit plan, common law claims for misrepresentation are preempted by the federal statute known as ERISA. This was made clear in the 2002, Northern District opinion styled, Erwin v. Texas Health Choice, L.C. Remedies under ERISA are limited to recovery of benefits, clarification of future rights as well as attorney’s fees, costs and, on rare occasion, equitable relief, according to 29 U.S.C.A., Section 1132(a). Additional common law remedies such as punitive damages or statutory relief such as the provision for treble damages for certain types of violations found in the Texas DTPA are not available.