Insurance Producer Only Required to Place Insurance Ordered
Barry Zalma
Mar 5, 2024
Read the full article at https://lnkd.in/gDmS4weG and see the full video at https://lnkd.in/gac73xPR and at https://lnkd.in/gc4_Vv28 and at https://zalma.com/blog plus more than 4700 posts.
Post 4747
Never Assume You Are Covered
Five Waters Properties, LLC, appealed the trial court order granting defendants, Mark Bone and Bailey Agency Inc, summary disposition.
In Five Waters Properties, LLC, v. Mark C. Bone and Bailey Agency Inc., No. 366075, Court of Appeals of Michigan (February 22, 2024) the Court of Appeals resolved the dispute.
BASIC FACTS
The failure of the Edenville Dam and subsequent failure of the Sanford Dam in May 2020, resulted in a devastating flood that caused substantial damage to homes and businesses in Midland County, Michigan. Five Waters was one of the businesses affected by the flooding.
Five Waters’ commercial insurance policy was renewed and each year they received correspondence inviting them to schedule a review of Five Waters’ policy. They did not do so.
To establish a prima facie case of negligence, a plaintiff must prove four elements: a duty owed by the defendant to the plaintiff; a breach of that duty; causation; and damage.
Generally, an insurance agent owes a duty to procure insurance coverage requested by an insured. Because there was no special relationship the Court of Appeal concluded that defendants did not have a duty to advise Five Waters as to the adequacy of its coverage.
The trial court properly granted summary disposition for defendants. The trial court correctly determined that defendants did not owe Five Waters a duty to assess and ensure the adequacy of the business insurance coverage and Five Waters failed to establish a special relationship that gave rise to a duty.
ZALMA OPINION
When insureds suffer a loss that is not covered by the policy they purchased they seem intent on suing the insurance producer who failed to force the insured to purchase a policy that would cover the loss different from the policy they purchased. They sue the insurance producer and find that case law in almost every state only requires the producer to place the insurance required. Although the producer asked the Plaintiff to review their coverages because of potential flood risks they did not until their property was damaged by a flood. Too little too late.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Sullivan and Harford later conceded liability on the intentional tort claim before a damages trial.
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Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
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Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
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This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
