What does the failure of a broker to exercise reasonable skill and care result in?

When a broker fails to exercise reasonable skill and care in their duties, it can lead to significant repercussions, including a potential Errors and Omissions (E&O) claim against them. This is because brokers have a fiduciary duty to act in the best interests of their clients, which includes providing accurate advice, properly assessing risks, and ensuring that clients receive appropriate coverage.

If a broker neglects these responsibilities, the client may suffer a loss as a result. For instance, if a policy is improperly placed or if important information is overlooked, causing a claim to be denied, the broker may be held liable for that error. Consequently, the client may pursue an E&O claim, seeking financial compensation for the broker's negligence. This highlights the critical importance of due diligence and expertise in the brokerage profession to protect both the client and the broker from potential legal repercussions.

Other options like a lesser premium or a higher likelihood of claims being approved do not directly correlate with the lack of skill and care, and an automatic renewal of a policy does not result from broker negligence but rather from the standard practice of policy renewal processes.