Claim Scenario: Clients
invested more than $1,500,000 in tenancy-in-common real estate interests (TIC)
that were allegedly unsuitable and did not meet their investment goals and
objectives. The registered representative testified at hearing that he did not
completely understand how a TIC operates or the risks involved in such an
investment. His testimony severely impacted the ability to defend the claim.
Estimated Claim Cost:
$600,000
Loss Prevention Tip:
Be certain that you fully understand an investment, product or service before
presenting it to a client. Utilize in-house training and services that provide
education about products before you offer them for sale. If the product is
found to be defective for example, the client may seek compensation from you
for failure to properly advise of the risks and costs.
All information provided in this blog is for informational
purposes only. The sources used are presumed accurate. CalSurance Associates,
Brown & Brown Program Insurance Services, Inc. and Brown & Brown, Inc.
will not be liable for any errors, omissions, losses, injuries or damages
arising from its display or use and will not assume responsibility for any misguided
information. No guarantees are implied.
