Guide · Insurance
Can you sue your insurance broker in California?
Yes. In California you can sue an insurance broker or agent who failed to use reasonable care in getting the coverage you asked for, if that failure left you without coverage for a loss. The broker can be liable for what the missing coverage would have paid. The broker’s duty is usually limited to the coverage you requested, but it can be broader.
The broker’s basic duty
A broker or agent owes the client a duty to use reasonable care, diligence and judgment in procuring the insurance the client requests (Jones v. Grewe). The broker does not have a general duty to recommend more coverage or to advise on whether coverage is adequate.
When the duty is broader
California courts have recognized a broader duty when (Fitzpatrick v. Hayes):
- The broker misrepresents the nature, extent or scope of the coverage being offered
- The client asks for a particular type or amount of coverage
- The broker holds itself out as having expertise in a given field of insurance
Common claims against brokers
- Failing to procure the coverage requested
- Telling the client a loss would be covered when it would not
- Letting a policy lapse or missing a renewal
- Errors on the application that lead to rescission
- Failing to tender a claim to the insurer on time
What you can recover
Generally the amount the coverage would have paid, plus other losses caused by the broker’s error. If the insurer may also be liable, the claims against the insurer and the broker are often brought together.
Deadline
Two years for professional negligence
Professional negligence claims against a broker are generally subject to the two-year limitation period in Code of Civil Procedure section 339. When it starts can be disputed, often from when the claim is denied.
An example
We represented the plaintiff in a professional negligence action against an insurance broker in Los Angeles Superior Court. The jury returned a verdict of $2.4 million and found the broker 100% at fault. Prior results do not guarantee a similar outcome.
Sources
- Jones v. Grewe (1987) 189 Cal.App.3d 950.
- Fitzpatrick v. Hayes (1997) 57 Cal.App.4th 916.
- California Code of Civil Procedure § 339.
Common questions
Don’t see yours? Call (323) 410-0300.
Can I sue my insurance agent for not recommending enough coverage?
Usually not, unless the agent took on a broader duty by misrepresenting the coverage, agreeing to provide specific coverage or holding itself out as an expert.
Can I sue both the insurer and the broker?
Often, yes. If the loss is covered, the insurer is responsible. If it is not covered because of the broker’s error, the broker may be.
Related
The information on this page is general and is not legal advice. Contacting the firm does not create an attorney-client relationship. Prior results do not guarantee a similar outcome.