& Nash. He is admitted to practice in all state and federal courts in
Louisiana and the Eastern Federal District Court in Texas, as well as
the United States Court of Appeals for the Fifth and Eleventh Circuits.
practice includes casualty litigation and insurance coverage disputes.
He is admitted to practice in both Louisiana and Texas.
400 Poydras Street
Suite 2600
New Orleans, Louisiana 70130
504.529.3333 Phone
504.529.3337 Fax
sdegan@degan.com
mgautreaux@degan.com
www.degan.com
brokers for failure to procure proper
coverage are not uncommon in Louisiana.
In fact, such allegations are almost a
"natural" off-shoot of first-party coverage
disputes between insureds, insurance
companies and insurance agents in the
property insurance context. Over the
last few years, though, a new defense to
broker liability claims has developed in
Louisiana. The purpose of this article is
to analyze some of the cases that have
addressed this defense.
In general terms, these cases involve
a factual scenario where an insured hired
an insurance agent to procure insurance
coverage, and the agent then consulted
a broker to assist in identifying and
obtaining an appropriate policy. Under
such facts, a traditional broker typically
has no direct communication with the
insured at all, dealing instead only with
the agent. The question then becomes
be liable to the insured for failure to
procure/produce proper coverage without
any direct communication or contractual
relationship with the insured. Several
cases have responded with a clear "no."
In
insured's Hurricane Katrina claims
against a broker because there was
no evidence of direct communication
between the insured and the broker.
There, Hurricane Katrina damaged
the insured's sports bar. Following
the insurer's denial of coverage, the
insured sued the broker, alleging it was
negligent in procuring the insurance,
misrepresented the scope of the policy's
coverage, and failed to advise the
insured that it was under-insured.
only a wholesale broker that had no
the court dismissed all claims against
the broker:
outlined in recent Orders of all
Sections of this Court, the Court
finds that Burns & Wilcox [i.e.,
the broker] has met its burden in
proving that T.J.'s has no possibility
of recovery against it under
Louisiana state law.
Nguyen v. Scottsdale Ins. Co.,
insured's claims against a broker
following Hurricane Katrina. There,
the insured obtained insurance
through a retail insurance agent who
had, in turn, approached the broker-
defendant.
Katrina losses because it had made
misrepresentations regarding the
policy and failed to procure adequate
insurance.
Dismiss, the court stated:
have addressed these arguments
on a Lack of Communication: An Overview
of a Developing Defense in Louisiana