Peter Biging and Colleen Murphy Quoted in "NY High Court Chips Away at Broker Liability Shield," Law360 March 3, 2014
Peter J. Biging and Colleen M. Murphy, partners in Goldberg Segalla’s professional liability practice focused on insurance agents and brokers, were interviewed by Law360 following a recent New York Court of Appeals ruling allowing a lawsuit against an insurance broker over business interruption coverage to proceed because of a potential “special relationship” between the broker and its client.
The ruling is troubling, Colleen noted, because a business owner is in a better position than an insurance agent to know how much the company would likely lose if it couldn’t operate for an extended period. “It seems to me that there would be a higher threshold. It would have to be more than alleging just a promise,” Colleen told Law360. “That should not be enough to impose additional duty. It’s going to open the floodgates of litigation, and more of these [suits] will go to trial.”
“When you look at this case, in combination with American Building Supply, it points to an erosion of what had been a very, very difficult standard,” Peter said. To avoid being targeted in suits, the article noted, brokers should document their interactions with clients and inform policyholders that they are not providing advice about whether insurance policies provide adequate coverage. “There’s going to have to be some built in disclaimers,” Peter continued. “I think that’s where we’re heading.”
Read the article here:
- “NY High Court Chips Away at Broker Liability Shield,” Law360, March 3, 2014 (subscription required)