Calif. Ruling Protects Brokers From Disgruntled Outsiders

Law360, New York (April 18, 2013, 9:54 PM ET) -- A California appeals court held Wednesday that an insurance broker wasn't liable to an investor who was unable to get coverage under a bankrupt real estate developer's policy for alleged vandalism and theft, a precedential ruling that helps shelter brokers from breach of duty claims brought by nonclients.

The order bars investor Michael Braum's professional negligence claims against broker Koram Insurance Center Inc., while also blocking Braum from winning coverage from Travelers Property Casualty Co. of America under a condominium policy issued to a developer.

On a broad...
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