Insurance Broker  with CoupleI am not a statistician. Frankly, I start to sweat when I look at spreadsheets, tables and charts. I don’t, however, need a table, graph or chart to know that there is a perception that insurance brokers and agents have questionable ethics and are generally thought to be untrustworthy. This is borne out by the Gallup poll, which historically places “insurance salespeople” near the bottom of the rankings for honesty and ethics of various jobholders.

I’m not sure when this perception started, but it was certainly solidified in the character of Ned Ryerson in 1993’s Groundhog Day. (“You remember me! Ned Ryerson! Bing! I used to date your sister until you told me not to.”) He hilariously and derisively perpetuated the myth of an overly aggressive, unethical, “anything for a sale” insurance broker.

One thing jumps out at me when reviewing the jobholders ranked above insurance salespeople on the list. Most (although admittedly not all) are not required to sell anything to the public and their personal income is not based on a percentage of a total sale or commission.

When I started practicing law, insurance agents and brokers were considered to be “professionals” in the same category as attorneys, accountants, architects and engineers. The statute of limitations in New York for claims against these professionals evolved during the 80s and 90s. It was common for claims against these non-medical professionals to be brought in New York as “malpractice” claims, and the courts applied a three-year negligence statute of limitations. In the early 80s, the New York Court of Appeals held that insurance brokers entered into a contract with their clients to purchase services and were subject to a six-year contract statute of limitations. This lengthened statute of limitations was then applied to the other non-medical professionals. (A legislated 2.5-year statute of limitations applied to doctors and other medical professionals.)

In September 1996, the New York State Legislature corrected this disparity and provided that a three-year statute of limitations applied to claims of malpractice. This three-year limit was applied to insurance brokers until 2001, when the Court of Appeals unanimously held that brokers are not professionals and that the six-year contract statute of limitations applied again to claims against them, rather than the three-year statute applicable to claims of negligence. The three-year statute continues to apply to lawyers, accountants, architects and engineers. This has been the law for the past 12 years.

The insurance brokers I have met are honest and caring individuals, who deserve the title of “professional” due to their training, expertise and continuing education requirements. They strive to serve their clients and obtain the protections required at the best price, despite the perception reflected in the Gallup poll that they are salespeople willing to glad-hand and stretch the truth to sell a policy and earn a commission.

Brokers need to recognize this perception in their dealings with clients and, perhaps, go out of their way to clarify their actions in marketing a policy and the reasons for their recommendations. As Ned Ryerson demonstrates in Groundhog Day, an individual’s good name can be improved through his acts despite the negative preconceptions of the professional group to which he belongs.