What is an insurance agent's fiduciary duty?

An insurance agent's fiduciary duty is fundamentally to act in the best interest of the client. This duty stems from the trust that clients place in agents to provide them with sound advice and suitable coverage options based on their individual needs and circumstances. The agent must prioritize the client's needs over their own financial gain or the interests of the insurance company they represent.

This duty encompasses various responsibilities, including providing accurate information, maintaining confidentiality, and ensuring that the policies recommended truly align with the client's financial goals and risk exposures. In fulfilling this role, the agent fosters a relationship based on trust and integrity, which is essential in the insurance industry.

While attempting to sell policies or avoiding conflicts of interest are also important considerations for an insurance agent, they do not encapsulate the core of the fiduciary duty, which is centered around serving the client's best interests. Moreover, representing the insurance company exclusively would conflict with the responsibilities tied to a fiduciary duty, as it could lead to situations where the agent prioritizes the insurer's interests over that of the client.