Insurance agents held accountable for arranging illusory health coverage for employees
This week the Court of Appeals upheld a $1.2 million dollar verdict against Joseph Saigh and Lawrence Wells. The jury had concluded that Saigh and Wells had allowed their employee to sell illusory coverage, provided by an unlicensed insurer, through negligent or intentional misrepresentations. The Court rejected the defendants claims that they were not responsible for the representations made by their employee and also rejected arguments that they owed no duty to the employer, even though they were retained expressly because they claimed to be "specialists in health insurance coverage."
The Court also allowed the corporate employer to collect exemplary damages from the defendants, based on the injury the company suffered to its good name. The court noted that as a result of the illusory coverage the Defendants arranged and facilitated, the corporate employer suffered loss of good employees, hundreds of complaints from employees and health care providers, and a loss of reputation. The case is Unibar Maintenance Services, Inc. v. Joseph Saigh and Lawrence Wells.