Dangers of signing on the (customer's) dotted line
Never sign an application – or any other insurance-related document – on behalf of a customer … even if it makes life a little easier for you or your customer in the short term. Because in the long term, big problems can arise.
For starters, the lower-than-recommended limits your customer actually chose and that you signed for? No longer valid. The election to waive UM/UIM and stacking that you signed? Not enforceable.
WHY ALL THE WORRY?
Short of having a customer grant you Power of Attorney, verbal authorization from the customer for you to sign documents on his or her behalf is not sufficient. After a loss occurs and a claim is filed, the customer may disavow having granted you authorization.
In such a case, the first thing a good attorney will do is ask the customer, “Is that your signature on the application?” As soon as the customer says “no,” it no longer matters why you signed the documents on his or her behalf. It simply becomes extremely difficult to hold the customer responsible for the contents.
ARE THERE OTHER REPERCUSSIONS?
There could be some serious ones, such as:
- A likely E&O claim filed by the carrier against you and/or the agency
- Possible suspension, revocation or non-renewal of your (resident and, perhaps, non-resident) license, fines, etc. because “forging” another person’s signature on insurance documents is an express violation of the state’s producer licensing act
- Potential agency termination by the affected carrier due to agency agreement provisions related to committing fraudulent acts and violating state insurance laws or regulations
- Possible criminal charges and the costs and stigma associating with defending them
THE BOTTOM LINE
Because you, as the producer, are not a party to your insured's contract of insurance, you should never, ever sign documents on a customer's behalf – even if they ask you to.