I previously wrote a series of blogs concerning broker negligence in New Jersey. I thought I would extend that series now into North Carolina. Under North Carolina law, “[n]egligence is the failure to exercise proper care in the performance of a legal duty which the defendant owed the plaintiff under the circumstances surrounding them.”1 North Carolina’s Courts have applied that same standard to insurance brokers.

“[I]f an insurance agent or broker undertakes to procure for another insurance against a designated risk, the law imposes upon him the duty to use reasonable skill, care and diligence to procure such insurance and holds him liable to the proposed insured for loss proximately caused by his negligent failure to do so.”2 Accordingly, if you ask for a certain policy and your broker fails to deliver it to you, there may well be liability under North Carolina law.

However, unlike other states such as New Jersey, a North Carolina agent has no duty to procure or advise on a policy that is not requested specifically by the consumer.3 Thus, “while an insurer does have the duty to obtain coverage requested by the proposed insured, the agent does not have a duty to advise the individual of other types of insurance coverage for which he is eligible, if that information is not requested”4

Accordingly, North Carolina can be considered an “order taker” state, whereby the insurance agent simply purchases what the client asks for and is under no duty to advise further.

1 Moore v. Moore, 268 N.C. 110, 112, 150 S.E.2d 75, 77 (1966).
2 White v. Consol. Planning, Inc., 166 N.C.App. 283, 301, 603 S.E.2d 147, 160 (2004) (quoting Kaperonis v. Underwriters at Lloyd’s, London, 25 N.C. App. 119, 128, 212 S.E.2d 532, 538 (1975)).
3 See Phillips v. State Farm Mut. Auto. Ins. Co., 129 N.C. App. 111, 113, 497 S.E.2d 325, 327 (1998).
4 Cobb v. Pennsylvania Life Ins. Co., 715 S.E.2d 541 (N.C. Ct. App. 2011).