A New York and New Jersey Lawyer Who Represents Policyholders and Beneficiaries in Life Insurance Denial Cases

In Amer. Bldg. Supply Corp. v. Petrocelli, decided by the New York Court of Appeals on November 19, 2012, the plaintiff claimed against its insurance broker that it requested bodily injury coverage for its employees at its Bronx facility, in the event an injury occurred, that the broker failed to procure. This type of coverage was expressly required under the lease agreement with the landlord. As can easily be surmised, an employee was ultimately injured at the premises.

The plaintiff brought forth claims of breach of contract and negligence. The lower court found for the broker on the grounds that the insured was presumed to have received and read the policy.

The court restated the familiar principle that: “Insurance agents have a common law duty to obtain requested coverage for their clients within a reasonable time or inform the client of the inability to do so; however, they have no continuing duty to advise, guide or direct a client to obtain additional coverage.”

It went on to hold that the “presumed” reading of a policy, when delivered, does not apply: “That plaintiff requested specific coverage and upon receipt of the policy did not read it and lodged no complaint, should not bar plaintiff from pursuing this action … The failure to read the policy, at most, may give rise to a defense of comparative negligence but should not bar, altogether, an action against a broker.”

This is an important development for policyholders in New York insurance law. If a policyholder requests specific coverage, and it is not provided, the policyholder may be able to survive a summary judgment motion. As a caveat, however, it should be observed that the court seemed to place importance on the fact that the subject policy had a personal injury exclusion for employees, which it said “hardly made sense,” since only employees and no customers entered the premises. Therefore, if a policyholder is to succeed in this type of claim, it would help greatly if there is other evidence, beyond uncorroborated testimoney and “he said, she said” accounts, showing that the requested insurance was in fact requested.

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