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Duties and Liabilities of Insurance Brokers
Posted on March 12, 2025 by Barry Zalma
Excellence in Claims Handling
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Cases in which insurance brokers’ liability is in question depend in part on whether brokers are seen to be serving a fiduciary role or simply acting as a conduit between the insured and the insurer.
A person or an entity is a fiduciary with respect to a plan to the extent:
he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, or he has any discretionary authority or discretionary responsibility in the administration of such plan.
Since 2004, two California appellate courts have taken the still-developing position on the law regarding insurance broker liability in different directions. In Hydro-Mill Company Inc. v. Hayward, Tilton and Rolapp Insurance Associates Inc., the court reduced insurance brokers’ exposure to their clients whereas Century Surety Co. v. Crosby Insurance Inc., increased insurance brokers’ duties to the insurers with whom they do business on behalf of their clients.
In California an independent insurance broker is not an agent of the insurer, but rather of the insured. In Hydro-Mill, the California Second District Court of Appeal cast doubt on whether an insurance broker serves in a fiduciary capacity.
By so doing it limited the ability of an aggrieved client to obtain punitive damages as a result of the broker’s error. In reaching its conclusion the court noted that: "A fiduciary relationship has been defined as ‘any relation existing between parties to a transaction wherein one of the parties is . . . duty bound to act with the utmost good faith for the benefit of the other party.’"
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(c) 2025 Barry Zalma & ClaimSchool, Inc.
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One Year Private Limitation of Action Provision Enforceable
Post 5233
See the video at and at and at https://zalma.com/blog.
Barn Roof Collapse Suit Attempts to Avoid Federal Court Fails Because of Fraudulent Joinder
In Funaro v. State Farm Fire & Casualty Co., United States District Court for the Western District of Pennsylvania, Civil Action No. 25-04, Judge: W. Scott Hardy (W.D. Pa. Nov. 19, 2025) the District Court was faced with motions by Plaintiff Funaro including the following:
1 Motion to Remand.
2 State Farm’s Partial Motion to Dismiss.
3 Statutory bad faith (42 Pa. C.S. § 8371) against State Farm alone
KEY FACTS
On January 10, 2021 a large barn roof in Honesdale, PA collapsed under weight of snow. The barn incurred structural damage, contents damage (including $90,000 to 100,000 in a custom French stove).
Plaintiffs were insured under a State Farm policy (using a standard ...
Discovery Attempt by Alleged Fraudulent Health Care Provider Fails
Post 5232
Read the full article at https://www.linkedin.com/pulse/party-seeking-discovery-entitled-anything-relevant-zalma-esq-cfe-ce7kc, see the video at https://rumble.com/v7204g8-discovery-is-entitled-to-anything-relevant-to-partys-claim-or-defense.html and at https://youtu.be/Nuet_er3qXU, and https://zalma.com/blog plus more than 5200 posts.
Upcoding and Health Care Fraud
In UnitedHealthcare Services, Inc., et al. v. Team Health Holdings, Inc., et al., No. 3:21-cv-00364-DCLC-DCP, United States District Court for the Eastern District of Tennessee, District Judge Clifton L. Corker (November 18, 2025) This is a discovery ruling, not a final merits decision.
The Disputes
This is a fraud/RICO lawsuit brought by UnitedHealthcare (and affiliates, collectively “United”) aganst TeamHealth (a large physician staffing company focused on emergency medicine). The companies have a history of mutual litigation over billing practices, including prior suits where TeamHealth accused ...
Discovery Attempt by Alleged Fraudulent Health Care Provider Fails
Post 5232
Read the full article at https://www.linkedin.com/pulse/party-seeking-discovery-entitled-anything-relevant-zalma-esq-cfe-ce7kc, see the video at https://rumble.com/v7204g8-discovery-is-entitled-to-anything-relevant-to-partys-claim-or-defense.html and at https://youtu.be/Nuet_er3qXU, and https://zalma.com/blog plus more than 5200 posts.
Upcoding and Health Care Fraud
In UnitedHealthcare Services, Inc., et al. v. Team Health Holdings, Inc., et al., No. 3:21-cv-00364-DCLC-DCP, United States District Court for the Eastern District of Tennessee, District Judge Clifton L. Corker (November 18, 2025) This is a discovery ruling, not a final merits decision.
The Disputes
This is a fraud/RICO lawsuit brought by UnitedHealthcare (and affiliates, collectively “United”) aganst TeamHealth (a large physician staffing company focused on emergency medicine). The companies have a history of mutual litigation over billing practices, including prior suits where TeamHealth accused ...
The Professional Claims Handler
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.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
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.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
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 ...
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 ...
