Suing Negligent Insurance Brokers
To get the compensation you deserve from this complex legal claim, you’re going to need help from an attorney well-versed in handling professional liability claims.
Elements of Professional Negligence Claims Against Insurance Brokers
For your lawsuit to be successful, the attorney handling your broker liability case must establish the four elements that constitute negligence under the law.
- Duty of care to the policyholder
- Breach of duty
- Causation
- Damages
The Challenge of Establishing an Insurance Broker’s Duty of Care
Establishing the duty of care the insurance broker legally owes you is difficult. This, in turn, makes it hard to establish a breach of duty.
Unlike an insurance agent, who works as a representative of a specific insurance company, a broker works with different companies to provide insurance options to the person seeking coverage. As such, they are generally considered to be acting in the interests of you, the person buying a policy.
While this would seem to constitute at least some duty of care, establishing this element is more complicated than that. A few jurisdictions impose more extensive duties on insurance brokers and may even recognize them as serving as risk managers to their clients. However, in many areas, the legal duty brokers have to policyholders who purchase insurance coverage through them is limited.
Unfortunately, some courts in Pennsylvania have found that brokers don’t have a duty to advise clients on their insurance needs unless a specific confidential relationship exists. This is all the more reason a seasoned broker liability attorney is needed.
The Complex Demands of Establishing Duty and Breach of Duty
The challenges of establishing the broker’s duty of care make it all the more important to partner with the right counsel. A knowledgeable attorney can build a strong case, backed by available evidence and testimony of expert witnesses, that demonstrates the obligations the broker had to you and how their actions or omissions fell below the standard of care.
Causation and Damages in an Insurance Broker Liability Claim
Your lawyer must show that the broker’s breach of their duty toward you directly caused the consequences, financial and otherwise, of not having sufficient (or any) insurance coverage.
Finally, your attorney needs to present and document the full array of damages you suffered because of the broker’s negligence. Such damages are case specific. By way of example, in the first-party context, damages may include the costs to rebuild a destroyed home for which you had insufficient coverage. In the third-party context, damages may include the value of a claim arising out of an injury at your business for which you wrongly believed your business would be covered when named as a defendant in a personal injury lawsuit.
When the insurance gaps, exclusions, or insufficient coverage has left you with significant losses, the damages for which you can seek compensation, too, are significant.
