Thanks for that enlightening commentary, Chuck. Actually, the E&O exposure IS the failure to obtain certain coverage for the landlord. What\’s the point of having an absolute pollution exclusion on a professional liability policy if it doesn\’t bar coverage for claims where a claimant seeks to hold the professional liable for damages flowing from an underlying pollution claim. Granted, in this case \”Professional\” appears to be a stretch, not only did the broker fail to get the coverage requested by his client, he also failed to read his own policy. He\’s lucky he\’s in NJ where actual policy language is less important to the courts than what a policy holder wishes the policy said.
My comment was merely directed to the ineptness of both the trial court and the appellate court, not whether the broker did anything wrong in regarding the coverage issue.
Coverage clearly should have been afforded the broker as there is an allegation being made by the insured as to whether he errored in not securing coverage. There is not enough information within the article (or proof), to determine if in fact, the insured has a valid negligence claim.
Counsel aptly points out that the lower courts, for some strange reason, focused on the underlying cause of action, which was not the basis of the coverage dispute between the broker and his carrier.
Let\’s assume the broker goofed and pollution coverage was available. Let\’s also assume that a carrier specifically excludes coverage for claims arising out of \”Pollution\” on the GL, property, and excess liability policy that it writes. Why should the carrier be forced to drop down and pick up a \”pollution\” claim on the insurance agent\’s E&O policy when the carrier does everything it can to exclude pollution on every other policy it writes? Just because the insurance agent committed a professional error doesn\’t necessarily mean the claim has to be covered.
The broker is not seeking coverage for the claim being made against the landlord. He is seeking coverage for the professional liability claim being presented to him by his client, the landlord.
There is nothing written in the article to indicate that the broker is wanting the underlying tort claim to be paid.
I think you should go back and read the article again (I did). The Supreme court required the insurer provide the broker with indemnity and defense in the claim the insured made, not the original torfteasor/the underlying cause of action.
Which was the reason for my \”Duh\” in the first place….
I agree that the Prof Liab carrier should not have to drop down in this case. But, if the insured pays out his own money to cover this claim, I guarantee you the E&O carrier will be paying some money on this in the even the broker truly errored here (although the insured is not off the hook as he should be reading his policy so that he knows exactly what sort of coverage he has – he assumed – and we all know what happens in that case….)
I would suggest that the E&O carrier\’s intention regarding the pollution exclusion was NOT to exclude a negligence claim that stemmed from a pollution incident. [Most of the carriers are ripping off each others language anyway so they may not have even known how this exclusion developed itself. In fact, they probably felt lucky to find what they thought was a loophole.] Since the E&O is written in the name of ABC Agent / Broker, the exclusion likely existed to prevent a first party claim by the broker seeking coverage for THIER OWN pollution incident. [Not for a \”prof. negligence\” claim of a third party that happened to be pollution related.]
Pollution coverages and exposures exist virtually everywhere and the coverages are common and readily available. The fact is there have to be 20+ carriers writting just pollution coverage. This E&O carriers attempt to deny coverage is reprehensible. I am sure that there is a Work Comp exclusion in that E&O policy as well. Would that E&O carrier have denied a \”negligence\” claim for that brokers failure to obtain WC on behalf of a client / 3rd party? I think not.
It\’s too bad it took a court ruling to secure coverage for this broker.
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I can\’t believe the carrier tried to get out of providing a defense to the broker.
The E&O exposure has NOTHING to do with whether they failed to obtain certain coverage for the landlord.
The allegations made by the landlord triggers coverage under the Professional Liability Insurance policy.
Thanks for that enlightening commentary, Chuck. Actually, the E&O exposure IS the failure to obtain certain coverage for the landlord. What\’s the point of having an absolute pollution exclusion on a professional liability policy if it doesn\’t bar coverage for claims where a claimant seeks to hold the professional liable for damages flowing from an underlying pollution claim. Granted, in this case \”Professional\” appears to be a stretch, not only did the broker fail to get the coverage requested by his client, he also failed to read his own policy. He\’s lucky he\’s in NJ where actual policy language is less important to the courts than what a policy holder wishes the policy said.
My comment was merely directed to the ineptness of both the trial court and the appellate court, not whether the broker did anything wrong in regarding the coverage issue.
Coverage clearly should have been afforded the broker as there is an allegation being made by the insured as to whether he errored in not securing coverage. There is not enough information within the article (or proof), to determine if in fact, the insured has a valid negligence claim.
Counsel aptly points out that the lower courts, for some strange reason, focused on the underlying cause of action, which was not the basis of the coverage dispute between the broker and his carrier.
Let\’s assume the broker goofed and pollution coverage was available. Let\’s also assume that a carrier specifically excludes coverage for claims arising out of \”Pollution\” on the GL, property, and excess liability policy that it writes. Why should the carrier be forced to drop down and pick up a \”pollution\” claim on the insurance agent\’s E&O policy when the carrier does everything it can to exclude pollution on every other policy it writes? Just because the insurance agent committed a professional error doesn\’t necessarily mean the claim has to be covered.
Missing the point, part II…
The broker is not seeking coverage for the claim being made against the landlord. He is seeking coverage for the professional liability claim being presented to him by his client, the landlord.
There is nothing written in the article to indicate that the broker is wanting the underlying tort claim to be paid.
I think you should go back and read the article again (I did). The Supreme court required the insurer provide the broker with indemnity and defense in the claim the insured made, not the original torfteasor/the underlying cause of action.
Which was the reason for my \”Duh\” in the first place….
I agree that the Prof Liab carrier should not have to drop down in this case. But, if the insured pays out his own money to cover this claim, I guarantee you the E&O carrier will be paying some money on this in the even the broker truly errored here (although the insured is not off the hook as he should be reading his policy so that he knows exactly what sort of coverage he has – he assumed – and we all know what happens in that case….)
I would suggest that the E&O carrier\’s intention regarding the pollution exclusion was NOT to exclude a negligence claim that stemmed from a pollution incident. [Most of the carriers are ripping off each others language anyway so they may not have even known how this exclusion developed itself. In fact, they probably felt lucky to find what they thought was a loophole.] Since the E&O is written in the name of ABC Agent / Broker, the exclusion likely existed to prevent a first party claim by the broker seeking coverage for THIER OWN pollution incident. [Not for a \”prof. negligence\” claim of a third party that happened to be pollution related.]
Pollution coverages and exposures exist virtually everywhere and the coverages are common and readily available. The fact is there have to be 20+ carriers writting just pollution coverage. This E&O carriers attempt to deny coverage is reprehensible. I am sure that there is a Work Comp exclusion in that E&O policy as well. Would that E&O carrier have denied a \”negligence\” claim for that brokers failure to obtain WC on behalf of a client / 3rd party? I think not.
It\’s too bad it took a court ruling to secure coverage for this broker.