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Criminal Acts by Public Adjusters 

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Although they are considered professional claims people they will are  not allowed to impinge on the work of the legal profession. Insurance  company adjusters and independent insurance adjusters working for  insurance companies can deal with insurance coverage issues but a PA may  not.  In one case, a public adjuster placed an insured in a position to pay  damages to the insurer. In Chubb & Son Inc. v. Consoli, 283 A.D. 2d  297, 726 N.Y.S. 2d 398 (N.Y. App. Div. 05/22/2001), a public adjuster  was involved in a scheme with one of Chubb\\u2019s adjusters to intentionally  inflate a claim and then pay Chubb\\u2019s adjuster to approve the claim. 

The  insureds\\u2019 public adjuster was later convicted on charges of mail and tax  fraud and Chubb\\u2019s representative was found guilty of defrauding Chubb.  The court, recognizing that a PA acts as an agent for the insured and  that there exists the well settled rule that a principal, even if  innocent, is liable for acts of fraud that are within the scope of an  agent\\u2019s actual or apparent authority, the court concluded that the  insured was liable to Chubb and the claim was forfeited.

Indiana has refused to accept PAs at all. In Professional Adjusters,  Inc. v. Tandon, 433 N.E. 2d 779 (1982), the Supreme Court of Indiana  found that the statute providing for licensing of certified PAs who  could then undertake negotiation of settlements between insureds and  insurers was an uncon-stitutional violation of the separation of powers  clause, in that it permitted practice of law by persons not required to  be admitted to the bar and not subject to discipline by the Supreme  Court.  

The core element of practicing law is the giving of legal advice to a  client. Merely entering into such relationship constitutes the practice  of law in Indiana. [Professional Adjusters, Inc. v. Tandon (1982), Ind.,  433 N.E.2d 779; In re Perrello (1979), 270 Ind. 390, 386 N.E.2d 174].  The public adjuster was hired by a client to give legal advice. He  undertook the proffered employment, proceeded to examine the case, and  gave advice as to what legal steps should be pursued. The exercise of  such judgment on behalf of a client constitutes the practice of law and  is restricted to persons who have qualified and been admitted to the  Bar. By entering into the relationship and by giving legal advice, the  public adjuster, a non-attorney, has engaged in the unauthorized  practice of law. [State ex rel. Disciplinary Com\'n of Supreme Court of  Indiana v. Owen, 486 N.E.2d 1012 (Ind., 1986)]    

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