In this insurance negligence matter, the plaintiff alleged that the defendants were negligent in failing to ensure that the plaintiff’s errors and omissions policy covered prior acts. The plaintiff alleged that the error on the policy required the plaintiff to defend a claim that should have been covered by its insurance and incur legal fees and costs. The defendants denied the allegations, disputing any liability to the plaintiff.
The plaintiff retained the defendant insurance broker to assist in the renewal of its errors and omissions policy in 2007. The defendant advised the plaintiff that it would work with the co-defendant for the renewal due to the co-defendant’s experience with errors and omissions policies. The plaintiff contended that the defendants were negligent in failing to review a copy of the plaintiff’s existing errors and omissions policy in order to secure the same coverage. Instead, the defendants obtained a quote for the plaintiff that contained an exclusionary period. This was not made known to the plaintiff by the defendants because the defendants presumed that the plaintiff’s existing policy also contained such a limitation in coverage. The coverage went into place on June 12, 2008. The plaintiff did not receive a copy of the policy and did not see that its policy precluding prior claims.
In 2009, a claim was filed against the plaintiff which should have been covered under the errors and omissions policy. It was at that time that the plaintiff learned that the policy contained the exclusionary time period. The plaintiff was forced to expend monies to defend the claim. The plaintiff brought suit against the defendants for reimbursement of attorney fees and costs in connection with that litigation. The defendants denied the allegations and disputed liability to the plaintiff. The parties did ultimately agree following mediation to settle the plaintiff’s claim for the sum of $600,000.