Inside: Is your insurance broker liable for your lack of insurance coverage?

Policyholders must understand the nature of causation for the loss of coverage in order to seek out the responsible party

It is easy for an insurance broker to view its liability to only its known clients. While that view makes sense from a business prospective, in the world of insurance litigation where a plaintiff is always looking for a source of compensation, brokers remain a likely target when things go awry. This article addresses an area of insurance broker liability to strangers to the policyholder-broker relationship.

The case of Business to Business Markets, Inc. v. Zurich Specialties provides a stark example of how an insurance broker can be left on the hook when an insurer denies coverage. In this matter, Business to Business Markets (“B2B”) contracted with an Indian company, Tricon Infotech, to create custom software for it. Part of the agreement required Tricon to obtain errors and omissions coverage to compensate B2B if Tricon failed to deliver.

Contributing Author

author image

Collin J. Hite

Collin Hite is the practice leader of the Insurance Recovery Group at Hirschler Fleischer, P.C (Richmond, Va.). He handles insurance recovery and coverage litigation nationally...

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.