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Duties and Liabilities of Insurance Brokers
Posted on March 12, 2025 by Barry Zalma
Excellence in Claims Handling
This blog post is just a taste of the full article that is only available to subscribers to Excellence in Claims Handling. Anyone can subscribe to “Excellence in Claims Handling” at https://barryzalma.substack.com/subscribe for only $5 a month or $50 a year.
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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Lawyers Attempt to Protect Assets of their Clients Charged with Insurance Fraud From Seizure by State Fails
Post 5071
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In The People v. David M. Browne et al., B332304, California Court of Appeals, Second District, Seventh Division (May 6, 2025) find criminal defense lawyers in contempt.
Attorneys David M. Browne and George A. Shohet appeal from the trial court's denial of their special motion to strike (Code of Civ. Proc., § 425.16, subd. (b)(1)) an affidavit filed by the Los Angeles County District Attorney's office on behalf of the People of the State of California to initiate a civil contempt proceeding against Browne, Shohet, their clients, and others based on alleged violations of three temporary restraining orders that barred the transfer or encumbrance of specified properties and assets. The trial court issued the ...
Suit Claiming Ex-President Attempted to Kill Plaintiff for Profit, Insurance Fraud, Assaults, Battery, and False Imprisonment Dismissed
Post 5070
See the full video at https://lnkd.in/gJ-rDMa8 and at https://lnkd.in/gG3ERkXB, and at https://zalma.com/blog plus more than 5050 posts.
In a suit entitled Ivette T Echenidue v. President Biden, et al., Civil Action No. 1:25-cv-00517 (UNA), Judge Chutkan of the United States District Court, District of Columbia (April 17, 2025) refused to acknowledge the claims of the plaintiff.
Judge Chutkan explained that Echenidue’s suit was before the court on its initial review of plaintiff’s pro se complaint. The court granted the in forma pauperis application and, for the reasons explained below, dismissed the case pursuant to 28 U.S.C. § 1915(e)(2)(B)(i), by which the court is required to dismiss a case “at any time” it determines that the action is frivolous.
IS THE ACTION FRIVOLOUS?
Judge Chutkan noted that “A complaint must contain sufficient factual matter,...
Workers’ Compensation Availability Eliminates Cover Under D&O Policy
Post 5069
Sexual Harassment in the Workplace is Subject to Workers’ Compensation Law
See the full video at https://lnkd.in/gMCSBEV3 and at https://lnkd.in/gdBcT9DW, and at https://zalma.com/blog plus more than 5050 posts.
Rice Enterprises, LLC (“Rice”) appealed the District Court’s order dismissing its claims for insurance coverage against Zenith Insurance Company and partially dismissing its claims against RSUI Indemnity Company. Rice argued the District Court erred in applying two exclusions from the Zenith policy and in finding that coverage under RSUI’s “Umbrella” policy had not been “triggered.”
In Rice Enterprises, LLC v. RSUI Indemnity Co and Zenith Insurance Company, No. 24-1880, United States Court of Appeals, Third Circuit (April 30, 2025) affirmed the decisions of the District Court.
FACTS
Rice operated eight McDonald’s franchises in Allegheny County, Pennsylvania. On September 21, 2021, Rice’s former employee, ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
Punitive Damages Must Be Added to Gross Income for Tax Purposes
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This blog post is just a taste of the full article that is only available to subscribers to Excellence in Claims Handling. Anyone can subscribe to “Excellence in Claims Handling” at https://barryzalma.substack.com/subscribe for only $5 a month or $50 a year.
A TASTE OF EXCELLENCE IN CLAIMS HANDLING
The stated purpose of punitive damages is to punish a wrongdoer civilly to deter the wrongdoer and others from acting wrongfully. Insurance Bad Faith litigants dream of large punitive damage awards as a bonus and revenge upon the insurer that did not treat them fairly.
Punitive damages may be awarded where there is substantial harm and where there is none. [Restatement (First) of Torts § 908 cmt. c (Am. L. Inst. 1939); see also ...
Read the full article at https://www.linkedin.com/pulse/duties-liabilities-insurance-brokers-barry-zalma-esq-cfe-mmpbc, if you Subscribe to “Excellence in Claims Handling” at https://barryzalma.substack.com/subscribe for only $5 a month or $50 a year.
Duties and Liabilities of Insurance Brokers
Posted on March 12, 2025 by Barry Zalma
Excellence in Claims Handling
This blog post is just a taste of the full article that is only available to subscribers to Excellence in Claims Handling. Anyone can subscribe to “Excellence in Claims Handling” at https://barryzalma.substack.com/subscribe for only $5 a month or $50 a year.
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 ...
