NY High Court Chips Away At Broker Liability Shield

By Bibeka Shrestha (March 3, 2014, 8:24 PM EST) -- New York's top court last week allowed a lawsuit against an insurance broker to proceed because of a potential "special relationship" between the broker and its client, the latest ruling to gnaw away at protections that brokers have long enjoyed against lawsuits from unhappy policyholders.

The majority of judges on the New York Court of Appeals nixed CH Insurance Brokerage Services' quick victory in a fight with a business owner who claimed the broker had steered her toward a policy with inadequate business interruption coverage.

Policyholders that find themselves with less-than-ideal coverage usually can't hold their insurance brokers liable for negligence...

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