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Insurance · Broker liability
Insurance Broker E&O Defense
We defend insurance brokers, agents and brokerages. Brokers are often named in a lawsuit after a claim is denied, sometimes as the target of last resort. Fernald & Zaffos defends those claims in California and Nevada through early dispositive motions, discovery and trial, led by Brandon C. Fernald.
Leads this practice
Brandon C. Fernald · Founding Partner
Founded the firm in 2009 after seven years at Norton Rose Fulbright. Admitted in California, Nevada, North Carolina and Illinois.
When brokers are sued
Brokers are often named in a lawsuit after a claim is denied, sometimes as the target of last resort. The allegations usually mirror the errors a client says the broker made:
- Failing to procure the coverage requested
- Misrepresenting what a policy covers
- Missing renewals, lapses or cancellations
- Placing coverage with an unsuitable or unqualified carrier
- Errors on applications that lead to rescission or denial
How we defend them
We understand the professional standards and coverage issues that decide these cases. A defense usually moves through three stages:
- Early dispositive motions. Challenges to the pleadings, including statute of limitations defenses, and arguments that the broker owed no duty beyond procuring the coverage requested.
- Discovery. Depositions and the placement file, building toward summary judgment where the record supports it.
- Trial. When a claim doesn’t resolve, we try it.
The standard of care
Brokers and agents are expected to use reasonable care in procuring the coverage a client requests. In California the basic duty is limited to that (Jones v. Grewe (1987) 189 Cal.App.3d 950). It can expand when the broker misrepresents the coverage, agrees to provide a specific kind of coverage or holds itself out as an expert in it (Fitzpatrick v. Hayes (1997) 57 Cal.App.4th 916).
Deadline
Report the claim to your E&O carrier right away
Most errors and omissions policies are written on a claims-made basis with notice requirements. Late notice can cost you coverage for the defense.
A recent result
We defended a national insurance brokerage against a multimillion-dollar claim arising from life insurance placed by the brokerage. After depositions, we filed a motion for summary judgment, and our client was dismissed with prejudice without paying anything in settlement. The case then went to trial against the insurer.
Insurance broker defense · Dismissal
Dismissed with prejudice
No settlement paid by our client, a national insurance brokerage
Summary judgment
Prior results do not guarantee a similar outcome.
Broker liability
We represent both sides
Our attorneys have litigated insurance disputes on both sides of the table.
For policyholders and businesses
Claims against brokers
Brokers and agents are expected to use reasonable care in procuring the coverage a client requests. When they fail, the client may be left uninsured at the worst possible time.
For brokers and agencies
Broker E&O defense
We defend insurance brokers, agents and brokerages through early dispositive motions, discovery and trial.
You are on this page
Common questions
Don’t see yours? Call (323) 410-0300.
A former client sued our agency after a claim was denied. What should we do first?
Report the claim to your E&O carrier right away, preserve the placement file and all communications with the client, and avoid discussing the merits with the client directly.
Can a broker be liable for not recommending coverage the client never asked for?
In California the basic duty is to procure the coverage requested. A broader duty can arise from the broker’s own statements or conduct, which is why the facts of the relationship matter.
Can these cases be resolved early?
Sometimes. Statute of limitations and duty arguments can end a case on the pleadings or at summary judgment. We have obtained dismissals with prejudice for national brokerages. Prior results do not guarantee a similar outcome.
Do you also sue brokers?
Yes. We represent clients on both sides of broker disputes, and we screen every matter for conflicts before taking it on.
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.