Policyholders do not study all the forms available for coverage, nor do they typically understand how policies can be tailored to provide better coverage through endorsements. In a recent blog about soft costs under a builders risk policy, Builders Risk Insurance and Soft Costs Claims, I noted the importance of selecting an experienced insurance agent that knows the builders risk area with great expertise:
Continue Reading Pick A Great Insurance Agent When Deciding Upon Builders Risk Coverage

Like many states, California law makes it difficult to sue for being “underinsured.” The law places the primary responsibility for securing enough coverage and the right kinds on the insured. An insurance company, agent or broker has no duty at law to recommend any particular coverages or limits. However, they are liable if they fail to procure the agreed upon coverage, make a misrepresentation about how the coverage works, or fail to fulfill some other “special duty” they voluntarily undertook.
Continue Reading California Court Rejects Another Half-Baked Underinsurance Case

It is a myth that big-name insurance companies are leaving the California homeowners market due to wildfires. They have not, but they are selling their usual homeowners policies with a twist – exclusions for fire losses. Carriers can and will do this so long as the customer also gets a fire policy from the California Fair Plan – a quasi-public insurer of last resort that provides fire coverage if no one else will. Such a sale does not violate the California minimum-standards for fire insurance policies and allows carriers to stay in the game and collect premiums.
Continue Reading Negligence by Captive Agents Is on the Rise Because They Don’t Understand the California Fair Plan But Are Now Brokering Them By the Truckload

Everyone who has been to law school learns about Negligence and the reasonable person standard. This standard is “what a reasonable person would have done in the same or similar circumstances.” However, an insurance agent will be held to a similarly situated insurance agent in the same circumstances.
Continue Reading The Standard of Care Owed by Insurance Agents in the District Of Columbia

In order to succeed on a claim of negligence against an broker/agent for failing to procure insurance, a plaintiff must establish (1) a duty of care; (2) a breach of said duty of care; (3) injury caused by the breach; and (4) actual loss or damage resulting from the injury. Recently the Supreme Court of Wisconsin, in Emer’s Camper Corral, LLC v. Alderman, 391 Wis.2d 674 (2020), addressed the evidence a plaintiff must present under the third factor in order to establish causation.
Continue Reading Insurance Being “Commercially Available” is Not Enough in a Broker/Agent Negligence Action

Last month, I discussed the difference between insurance agents and insurance brokers, and how the actions of insurance agents, (and during limited circumstances, those of insurance brokers), can bind an insurance carrier. Here, I will discuss two different causes of action that may be brought against an insurance broker or an insurance agent: breach of fiduciary duty and negligence.
Continue Reading Breach of a Fiduciary Duty and Negligence by an Insurance Agent or Broker: What is the Difference?

Florida law distinguishes between insurance agents and insurance brokers.1 In Essex Ins. Co. v. Zota, the Florida Supreme Court defined an insurance broker as an individual who “represents the insured by acting as a middleman between the insured and the insurer, soliciting insurance from the public under no employment from any special company…[and] places it with a company selected by the insured.”2 If the insured has no preference as to the company, the broker can select the company.3 An insurance agent, on the other hand, is someone who “represents an insurer under an exclusive employment agreement by the insurance company.”4
Continue Reading When Can an Insurance Carrier be Liable for the Actions of its Agents?

In a recent Opinion,1 the New Jersey Appellate Division affirmed a large grocery store cooperative’s $12 million trial award against its insurance broker for coverage advice that allegedly left its stores exposed to millions of dollars in Superstorm Sandy damage.
Continue Reading Grocery Chain Left Without a Reason to Cry Over Spoiled Milk After Court Affirms Multi-Million Dollar Verdict for Loss from Insurance Broker’s Coverage Advice

My post earlier this week, Are Insurance Agents McDonald’s Order Takers or Professional Advisors? The Massachusetts View, created some buzz. So, I have decided to follow up with insurance agent law in South Carolina where they are having their presidential primary vote today. If a Northern state like Massachusetts follows the “order taker” view, do you have a guess whether a state way down in Dixie will follow the same reasoning?
Continue Reading Is An Insurance Agent an Order Taker or A Professional Advisor? The South Carolina View