PIANJ Files Court Brief in ‘Standard of Care’ Case

December 15, 2003

The Professional Insurance Agents of New Jersey Inc. announced that it was recently granted permission by the state’s Supreme Court to file an amicus curiae (friend of the court) brief in an important case that could raise the standard of care an insurance producer owes to his client.

“PIANJ realized the far-reaching implications this case could have on producers and asked to be heard by the high court,” stated President John D’Agostino Jr., CIC. “In the amicus brief, PIANJ asserts that the appellate division appropriately declined to extend the legal obligation of agents and brokers beyond the boundaries established through years of precedent.”

The bulletin described the case, President vs. Jenkins, as involving the policyholder’s allegations that his broker breached its professional duty of care by failing to bridge a gap in his medical malpractice coverage.

“The majority of the appellate division justices found the broker did not breach any legal duty and the coverage gap was created solely by the intentional actions of the policyholder, of which the broker was not notified,” said the PIANJ. “The court held that a broker breaches no duty to an insured to affirmatively ascertain the existence of gaps in the insured’s coverage and to advise him accordingly. However, one judge disagreed, bringing the matter before the Supreme Court.”

The PIANJ said it “also supports the appellate court’s finding that, absent notice or a specific initiating inquiry from the client, a producer has no affirmative duty to advise an insured of gaps in his insurance coverage. PIANJ told the high court that an extension of the existing legal duty is unwarranted and would make agents and broker guarantors against coverage gaps.

The case is expected to be heard by the Supreme Court in early 2004.

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