APPELLATE COURT DECIDES INSURANCE BROKER MAY BE LIABLE TO THIRD PARTY IN NEGLIGENCE FOR OBTAINING POLICY THAT DID NOT COVER THIRD PARTY'S CLAIM AGAINST INSURED

In Business to Business Markets, Inc. v. Zurich Specialties (Dec. 27, 2005, B175388), Division Eight of the Second Appellate District held in a published opinion that a surplus lines insurance broker owed a duty of care to a third-party claimant, even though the broker and the third party had no direct contact, were not in privity of contract, and the third party was not named on the policy. The court ruled the third party could maintain a professional negligence action against the broker for obtaining a policy that did not cover the insured’s liability to the third party. Click here to read the court’s opinion.

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