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

One of the first topics anybody should consider before claiming an insurance agent is negligent is the specific state law on the topic. Since virtually all states require people that sell any type of insurance to be licensed, many find it surprising that some states only impose a duty of care as an “order taker” rather a “professional advisor.” So, in Massachusetts, what duty does the law impose?
Continue Reading Are Insurance Agents McDonald’s Order Takers or Professional Advisors? The Massachusetts View

As amazing as it may sound, insurance brokers in California have no duty at law to their customers when procuring insurance to advise of adequate coverage. This includes giving a customer advice on what appropriate policy limits may be, what type of exclusions a policy may contain and appropriate additional living expenses or business income coverage limits. After the outbreak of numerous wild fires in California over the past few years, many insureds have found that they were grossly underinsured. Insureds are presumably asking the question: ‘Why didn’t my broker tell me I did not have sufficient insurance coverage to rebuild my home? Surely my broker must be liable, this is my broker’s only job.’ Unfortunately, in all likelihood, the broker is off the hook.
Continue Reading Checklist for California Insurance Broker Negligence Claims

Brent Winans, Jessica Kirkwood-Alley, David Thompson, and Chip Merlin

David Thompson of the Florida Association of Insurance Agents (FAIA) is a premier insurance agent educator who spends most of his time on the road teaching insurance agents how to ply their trade. This morning, I was on a panel moderated by Thompson, with insurance agent defense attorney Jessica Kirkwood-Alley and insurance expert Brent Winans. The topic was how insurance agents can avoid errors and omissions claims.
Continue Reading Insurance Agents Play An Important Role In Everyday Life