RECENT DEVELOPMENTS AFFECTING PROFESSIONALS’, OFFICERS’, AND DIRECTORS’ LIABILITY INSURANCE

• Published in: Tort trial & insurance practice law journal 2017-01, Vol.52 (2), p.595-620
• Main Authors: Strick, Daniel S., Bila, William, Blanchard, Eric, Hamblen, Nick, Kerman, Jeremy, Mikulaninec, Kevin, Kim, Andrea, Biging, Peter J., Kremin, Todd
• Format: Article
• Language: English
• Subjects: Accountants; Brokers; Car washes; Declaratory judgments; Directors' and officers' liability insurance; Education; Federal court decisions; Insurance coverage; Laws, regulations and rules; Liability insurance; Litigation; Malpractice insurance; Marketing; State court decisions
• ISSN: 1543-3234; 1943-118X

"111 In reaching this decision, the court confirmed that "professional negligence" claims against an insurance broker or third-party administrator are contract claims for which only ordinary "contractual damages" and not punitive damages may be available.112 In PRMConnect, Inc. v. Drumm, 113 the federal court for the Northern District of Illinois went a step further and held that the economic loss rule, known as the Moorman Doctrine in Illinois, does not to apply to extra-contractual claims that a client (as opposed to any other third party) brings against an insurance agent or broker.114 F. Personal Liability of Owner for Conduct in Capacity as Broker Employee Lastly, courts this year addressed the question of when an owner of an incorporated insurance brokerage can be sued personally for alleged negligence occurring in his performance of his duties as an employee of the company. In JT Queens Carwash, Inc. v. JDW & Associates, Inc.,115 the court concluded that personal liability depended on whether and the extent to which the owner/ employee had personally "engaged in independent tortious conduct that could give rise to his personal liability" separate and apart from any torts alleged against his agency.116 There, the plaintiff asserted claims against insurance broker JDW & Associates, Inc. and its owner, Jay Weiss, on the theory that they had negligently failed to procure general liability insurance naming a carwash business's landlord as an additional insured.117 The trial court dismissed all of the claims against Weiss individually.118 However, on appeal the appellate court reinstated the negligent misrepresentation claim against Weiss.