Former MLB Pitcher Matt Garza Serves Up Reminder for Insurance Agents to Keep Their Eye on the Ball During Application Process

San Diego, Calif. (May 12, 2023) - It is well-established that providing complete and accurate information to insurers during the insurance application process is critical. This holds true regardless of the type of insurance an applicant is seeking, or whether an insurance agent is participating in the process. A current case involving former MLB pitcher Matt Garza underscores exactly how important it is for insurance agents to pay close attention when assisting clients.

In the Garza matter, which is pending in the Superior Court of California, Los Angeles County, it is alleged that Mr. Garza filed a claim for disability insurance with Lloyds of London after suffering a career ending injury playing for the Milwaukee Brewers. The insurer denied Mr. Garza’s claim because Mr. Garza provided incomplete and inaccurate information on his insurance application. Mr. Garza blamed his insurance agent, and filed suit for professional negligence. Mr. Garza’s agent sought an early dismissal of the case, arguing that insurance agents have no duty to conduct an independent investigation to ensure that all information on an application is correct.

Due to the specific allegations in this case, the court rejected the agent’s position and will permit Mr. Garza’s claim to proceed. The court reasoned that Mr. Garza properly pled the insurance agent’s knowledge that the information provided on the application was incomplete and inaccurate. The court explained, “Plaintiff alleges more than a simple failure of the insurance brokers to ‘independently investigate information provided by the insured.’ The allegations, liberally construed, support the claim that the Defendants knew enough to impose on them a duty to obtain additional information, which they failed to do.” The court further reasoned that Mr. Garza sufficiently pled that the agent played an “active role” in procuring the insurance, which involved “actual knowledge of the incompleteness of the information that had been submitted and the need to obtain additional information.”

Takeaway

The Garza matter serves as a reminder that insurance agents must be careful when assisting clients, particularly when they know that a client is providing information to an insurer that is not 100% complete or truthful. In these situations, agents should seek additional information and work with clients to adjust applications as necessary. That way, if the agents' actions are challenged later, they will be in a position to establish that they took all necessary steps in accordance with their professional duties.

For more information about this case, contact the author of this alert. Visit our Professional Liability Practice page for additional alerts in this area.

Author:

Brian Slome, Partner