to Procure Adequate Insurance and the
Duty of the Insured to Read the Policy
insurance coverage, employment litigation and products liability.
30 North Haddon Avenue, Suite 200
Haddonfield, New Jersey 08033
risk that inadequate insurance will be
procured. When an insurance claim is
denied or a policy's limit of liability is
insufficient, the policyholder will look
to the broker's actions to determine
liability. When an insurance broker
promises, or gives some affirmative
assurance, that he will procure a policy
of insurance under such circumstances
as to lull the insured into the belief that
such insurance has been affected, the
law will impose upon the broker the
obligation to perform the duty which
he has assumed.
number of theories including breach of
contract and professional negligence.
that is premised on a broker's failure to
procure adequate insurance, the broker
may raise the defense of the insured's
negligence in failing to read the policy.
However, this defense is not always
Liable to Insured Who Failed
to Read Policy
surance brokers cannot avoid liability for
failure to procure the correct insurance
by claiming that the insureds have a duty
to read their insurance policies.
unavailable to an insurance broker who
asserts that the client failed to read his or
her insurance policy.
signed but not read by the plaintiffs.
Two months after the policy was issued
Mr. Morrison died as a result of injuries
from a car accident. After making a claim
for life insurance, Mrs. Morrison received
notice that the claim was denied because
the application was improperly completed
with respect to information regarding a
driver license suspension. Mrs. Morrison
filed a claim alleging that the agents
the insurance. The agent countered with
the fact that the Morrisons did not read
The Tennessee Supreme Court ad-
dressed this defense stating that "[a]gents
employed...for their expertise...may not
claim any greater duty on their clients'
part to anticipate and rectify their errors."
The Court would not allow the agents
to shield their own negligence with
the fact that their clients didn't catch
Similarly, in Aden v. Fortsh,
"[i]t is the broker, not the insured, who
is the expert and the client is entitled
to rely on that professional's expertise
in faithfully performing the very job he
or she was hired to do."
negligence principles could be applied in
a professional malpractice case in which
"the client's alleged negligence, although
not necessarily the sole proximate cause
of the harm, nevertheless contributed
to or affected the professional's failure