This was a professional malpractice claim brought by the plaintiff insurance company against the defendant insurance agency. The plaintiff claimed that the defendant was negligent in failing to name the plaintiff's insured, Powerscreen, as an additional insured on an insurance policy placed with another insurance company for the defendant's client, Southeast Industrial Associates. The plaintiff alleged that the defendant knew or should have known that the lease between Powerscreen and Southeast Industrial Associates required that Powerscreen be named as an additional insured on Southeast Industrial Associate's policy. As a result, the plaintiff claimed that it was required to pay $380,000 to settle a personal injury suit against its insured, which should have been paid by Southeast Industrial Associate's insurance carrier. The defendant insurance agency denied any knowledge of the contractual obligations between Powerscreen and Southeast Industrial Associates and maintained that it issued the insurance requested by its client, Southeast Industrial Associates.
The plaintiff insurance company issued a commercial general liability policy to Powerscreen, a company that rents heavy construction equipment. Powerscreen entered into a lease agreement to lease rock crushing equipment to Southeast Industrial Associates (Southeast). Southeast had obtained various insurance, including worker's compensation, auto, commercial general liability and property insurance, through the defendant insurance agency.
Evidence showed that the defendant took an oral application from Southeast over the telephone and 12 days later, met with a representative of Southeast. The defendant accepted Southeast's application for insurance and obtained the coverage through the non-party, CNA insurance.
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