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Insurance · Broker liability
Insurance broker and agent liability
Insurance brokers and agents must use reasonable care in getting the coverage a client asks for. When a broker’s error leaves a client uninsured, the broker can be liable for the loss the coverage would have paid. Fernald & Zaffos represents clients on both sides of these disputes in California and Nevada: clients harmed by broker errors, and brokers, agents and brokerages defending against them.
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.
Broker liability
We represent both sides
We have won a jury verdict against a broker and a dismissal for a national brokerage. Prior results do not guarantee a similar outcome.
For policyholders and businesses
Claims against brokers
When a broker fails to procure the coverage you asked for, misstates what a policy covers or lets coverage lapse, we pursue the broker for the loss.
For brokers and agencies
Broker E&O defense
We defend insurance brokers, agents and brokerages through early dispositive motions, discovery and trial.
The broker’s duty
In California a broker or agent owes a duty to use reasonable care, diligence and judgment in procuring the insurance the client requests (Jones v. Grewe (1987) 189 Cal.App.3d 950). The duty can be broader when the broker misrepresents the coverage, the client asks for a specific kind of coverage, or the broker holds itself out as an expert in that coverage (Fitzpatrick v. Hayes (1997) 57 Cal.App.4th 916).
Claims usually follow a denied claim. The insurer says the loss is not covered, and the client asks why the broker did not get coverage that would have paid it.
Common allegations
- 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
- Failing to tender a claim to the carrier on time
Deadline
Broker negligence claims have a short limitation period
In California, professional negligence claims against a broker are generally subject to a two-year statute of limitations (Code Civ. Proc. § 339). When the period starts can be disputed, so get advice early.
Broker liability results
Insurance broker liability · Verdict
$2.4M
Jury verdict against an insurance broker, found 100% at fault
Los Angeles Superior Court
Read the case study
Insurance broker defense · Dismissal
Dismissed with prejudice
No settlement paid by our client, a national insurance brokerage
Summary judgment
Insurance broker defense · Dismissal
Dismissed with prejudice
Multimillion-dollar suit against a national brokerage dismissed on statute of limitations grounds
Dismissal on the pleadings
Prior results do not guarantee a similar outcome.
Common questions
Don’t see yours? Call (323) 410-0300.
Can I sue my insurance broker?
Yes, if the broker failed to use reasonable care in getting the coverage you asked for and that failure caused your loss. Common examples are failing to procure requested coverage, misstating what a policy covers and letting a policy lapse.
What can I recover from a broker?
Generally the amount the missing coverage would have paid, along with other damages caused by the broker’s error. The details depend on the facts.
Is my broker responsible for knowing what coverage I need?
Not always. In California the basic duty is to get the coverage the client requests. The duty can expand if the broker held itself out as an expert or made promises about the coverage.
Do you defend insurance brokers?
Yes. We defend brokers, agents and brokerages against errors and omissions claims, from early motions through trial.
How long do I have to sue a broker?
In California, professional negligence claims against a broker are generally subject to a two-year limitation period. Contract claims may have longer periods. Get advice as soon as a claim is denied.
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.