What does "fiduciary duty" in insurance entail?

Fiduciary duty in insurance embodies the obligation to act in the best interests of another party, typically involving a relationship where one party places trust and confidence in another. In the context of insurance, this duty often exists between an insurer and the insured or between an agent and their clients. It requires that the party with the fiduciary duty prioritize the interests of the other party above their own.

This principle is fundamental in fostering trust in insurance relationships, as it ensures that agents or insurers are not merely seeking their own financial gain but are instead advocating for the best possible outcomes for their clients. This obligation extends to providing sound advice, making choices that benefit the client, and promoting fairness in all dealings.

While other aspects mentioned, such as confidentiality and informing clients about policy exclusions, are important components of an insurance professional's responsibilities, they do not encapsulate the core essence of fiduciary duty, which is fundamentally about prioritizing the entrusted party's interests. This ensures that clients receive appropriate guidance and support, which is critical in the often complex world of insurance.