& 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 |