In a previous article,1 we discussed a number of then-recent appellate decisions regarding important issues pertaining to actions against insurance agents or brokers for failure to procure desired and/or requested insurance coverage. We summarized several decisions that set forth and applied well-settled general propositions of law regarding the duties of an insurance agent or broker to its customer/insured, including the important concepts that “[a]n insurance agent or broker has a common-law duty to obtain requested coverage for a client within a reasonable amount of time or to inform the client of the inability to do so”; “an insurance agent’s (or broker’s) duty to its customer is generally defined by the nature of the customer’s request for coverage”; and “[a]bsent a specific request for coverage not already in a client’s policy or the existence of a special relationship with the client, an insurance agent or broker has no continuing duty to advise, guide or direct a client to obtain additional coverage.” See e.g., Obomsawin v. Bailey, Haskell & LaLonde Agency, 85 AD3d 1566 (4th Dept. 2011); Axis Constr. v. O’Brien Agency, 87 AD3d 1092 (2d Dept. 2011), and cased cited therein.
We also focused, more specifically, on an important issue that we characterized as “somewhat unsettled but soon to be addressed by the Court of Appeals”the issue of the customer/insured’s duty to read the policy, and the effect of that duty upon the agent’s or broker’s liability for failing to procure requested coverage. The post-Hurricane Sandy increase in potential claims and/or actions against insurance agents or brokers (for failure to procure flood insurance), as well as the fact that the Court of Appeals has recently resolved the conflict among the departments and settled the issue of the effect of the insured’s failure to read the policy and complain of its deficiencies make this topic ripe for revisiting at this time.
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