City Blueprint & Supply Co. v. Boggio - 2008-1093 ( La. App. 4 Cir 12/17/08)

Rule:

A plaintiff may recover for loss arising from the failure of an insurance agent to obtain insurance coverage if plaintiff can establish three elements: (1) an undertaking or agreement by the agent to procure insurance; (2) failure of the agent to use reasonable diligence in attempting to place the insurance and failure to notify the client promptly if he has failed to obtain the insurance; and (3) that actions of the agent warranted an assumption by the client that he was properly insured.

Facts:

On August 29, 2005, the building in which plaintiff's business was located sustained damage from flooding associated with Hurricane Katrina. The owners testified that it was not until after the hurricane that they learned they did not have flood insurance on the property. Plaintiff filed suit against defendants, an insurance agency, a carrier, and an insurance company, for negligence and negligent misrepresentation, breach of fiduciary duty, failure to obtain flood coverage, failure to advise regarding flood insurance options and availability, and failure to train and adequately supervise agents regarding flood coverage options. The trial court properly granted defendants' motion for summary judgment. Plaintiff appealed. 

Issue:

Could the defendants be held liable under the circumstances? 

Answer:

No.

Conclusion:

The Court of Appeal of Louisiana held that defendants owed no duty to procure flood insurance for plaintiff and had no duty to advise plaintiff with respect to coverage. Plaintiff's claim for negligent misrepresentation failed, because a simple review of the policy would have put the owners on notice that their company was not covered for damages arising from a flood. The judgment was affirmed.