“If your agency procured property insurance coverage for the retail, hotel, or restaurant industry, there is both a substantial likelihood that your policyholders will end up either without any, or with insufficient, business interruption coverage for the losses incurred as a result of governmental lockdowns of businesses and stay-home orders,” Goldberg Segalla’s Peter J. Biging writes in an article for Law360. “With no other option to recoup their losses, there is a very good chance they will look to pursue recoveries against their agents and brokers for failing to advise them to purchase or failing to purchase appropriate coverage.”
In the article, Peter, co-chair of the firm’s nationwide Management and Professional Liability practice, breaks down how post-pandemic claim activity will come in four waves, starting like the wave of claims that typically follow natural disasters. Next, there will be denials of claims for a variety of reasons, such as failure to list certain structures on the policy. Third, there will be a wave of E&O claims seeking to blame the agent or broker for the absence of coverage for the losses incurred. Finally, Peter talks about how there will be an additional wave of claims traceable to the forced migration by many insurance agents and brokers to remote work, without the necessary experience, processes, and procedures in place to ensure adherence to best practices in the course of taking applications for, reviewing, and confirming coverage.
Peter also offers suggestions for what insurance agents and brokers can still do to mitigate against the E&O exposure as well as steps to take going forward.
“Insurance Brokers Should Expect Wave of E&O Claims,” Law360, July 26, 2021
Peter J. Biging is an accomplished trial and appellate attorney with more than 30 years of experience as a litigator in the state and federal courts of New York. As co-chair of the firm’s nationwide Management and Professional Liability practice group, Peter counsels and defends directors and officers against claims alleging fraud, negligence, and breach of fiduciary duties, and a variety of professionals against claims based on alleged errors and omissions (E&O) in the performance of their professional services. He also regularly litigates labor and employment practices liability claims, commercial disputes, and municipal liability claims premised on alleged civil and constitutional violations.