LifeQuote has added an advisory guarantee to its underwriting service in a bid to protect intermediaries against being sued by their clients for nondisclosure.
The guarantee, which covers all users of the firm's Express Underwriting service, means that LifeQuote will shoulder the risk of any possible future accusations by clients to their advisers.
This is currently the largest issue facing intermediaries advising in the protection market, according to Richard Verdin, sales & marketing director at LifeQuote.
"The single largest threat to advisers selling protection is an allegation by a customer, or their relative, that they negligently misadvised them on how to answer application questions," he said.
Backing up Verdin's view, Maria White, life claims manager at Standard Life, said: "We sometimes find when a claim is rejected due to nondisclosure that the customer accuses their adviser of omitting important medical facts from the application form, facts that the customer says were disclosed to the adviser."
Jason Hurley, head of business development at RGA, agreed. "We often decline claims and the policyholder says that the adviser told them it was OK not to disclose information. Even if the policyholder is lying, the Ombudsman may side with the customer," he said.
The new service is available to all directly authorised advisers and principals with appointed representatives' advisers. Friends Provident, Legal & General, Norwich Union, Scottish Equitable, Scottish Provident, Scottish Widows, Standard Life and Liverpool Victoria are supported through the underwriting service.
