Agents and Brokers
Massachusetts law generally provides that insurance agents have no duty to provide advice regarding coverages and no responsibility for a policyholder's decision how much or what type of insurance coverage to purchase. Nonetheless, the agent is often accused of responsibility when a policyholder is faced with an underinsured or uninsured claim. Example: A policyholder has a loss caused by surface water infiltration and is told his Homeowners Insurance does not cover floods. He needed to have bought a separate policy of flood insurance. The agent is sued for failure to advise his customer to buy insurance, telling him he was "fully insured" or "all set," or even telling him he was covered if there was a flood. Under Massachusetts law it is likely all of these claims should be dismissed before trial. Recent cases in which I have obtained good results include the following:
In Capozza v. Johnson, where a pedestrian struck at high speed by a Mercedes, suffering significant leg injuries, lost wages and medical expenses. Suit was brought against the motorist and his insurance agency. The Mercedes had minimum insurance limits, despite the fact it was a lease vehicle and the lease required higher limits. The evidence established the agency procured the amount of insurance requested. The court denied the agency's motions to dismiss and submitted the case to a jury, which found the agency was not negligent, and awarded $1.5 million against the Mercedes operator.
In Greaves v. KD Agency, a fire consumed the policyholder's house and the amount of coverage purchased was lower than the amount owed on his mortgage. The policyholder sued claiming the agent forged his name to a new policy which reduced his coverage limits. At trial it was shown the policyholder knew about the new policy and had called the agency asking about the return premium check for the old policy, which he received and cashed before the fire. He denied receiving the new policy or asking for reduced coverage limits, or instructing the agency to sign his name to the application. The jury rejected the claim for replacement cost damages which would have exceeded $400,000.
Many E&O cases are not resolved by trial, but on a motion for summary judgment. Typical fare are cases involving underinsured motorist limits, undeclared home businesses and uninsurable losses.
Here are some case decisions and briefs from my practice: