Sued For Good Work – Expert Required to Establish Agent’s Negligence

Sued For Good Work – Expert Required to Establish Agent’s Negligence

Insurance agents and brokers are insurance professionals whose actions in placing insurance require compliance with the standards of practice and skills of an insurance broker which are not necessarily matters of common knowledge. Under Pennsylvania law, and all of the United States, an insurance broker must exercise that degree of care that reasonably prudent businessperson in brokerage field would exercise under similar circumstances.


In Aslam v. Higgins Insurance Associates, Inc., 330 MDA 2013 (Pa.Super. 12/12/2013), download a copy here, Mohammad Aslam appealed from the trial court order granting summary judgment in favor of Higgins Insurance Associates, Inc., d/b/a Higgins Insurance (“Higgins”). The issue before a Pennsylvania appellate court is whether the trial court abused its discretion in granting summary judgment in an insured’s negligence action against an insurance broker. Aslam, the insured, alleged Higgins was negligent when it failed to procure sufficient insurance coverage for his property, failed to warn him that he was underinsured, and failed to explain the 80% co- insurance clause in the policy.

Aslam and his wife, Akhter Aslam, were the owners of a multi-unit apartment building in Port Carbon, Schuylkill County, known as the Town Clock Apartments. On behalf of Higgins, insurance agent John Sink procured property insurance for Aslam through Old Guard Insurance Company, now known as Westfield Group, in an amount of coverage in excess of $1,000,000.00. Thereafter, due to excess claims, Old Guard did not renew Aslam’s policy.

Aslam, a physician, claimed little knowledge of insurance, and asked Sink to help him obtain coverage. Sink informed Aslam that finding coverage would be difficult, but he eventually did so through the Pennsylvania Fair Plan (“Fair Plan”). A representative of Higgins filled out the Fair Plan policy application and gave it Aslam to sign; the policy had a $500,000.00 limit and an 80% co-insurance clause.

In September 2003, the apartment building sustained considerable roof damage during a windstorm. Fair Plan hired McShea Associates as its adjuster, and McShea calculated the loss to be $95,606.00. McShea also determined that Aslam’s coverage should have been closer to $1.5 million, and because the policy was for only $500,000.00, Aslam was subject to a co-insurance penalty and thus received only $28,747.43. Additionally, the Fair Plan policy did not provide coverage for loss of rental income.

Aslam filed a complaint against Higgins alleging breach of fiduciary duty, breach of good faith and fair dealing, breach of fiduciary duty in failing to inform them of risk, and negligence. In its motion for summary judgment, Higgins averred that Aslam admitted in his deposition that he knew the policy limit was $500,000.00, that he knew there was an 80% co-insurance clause, and that he knowingly signed the policy containing these provisions. Aslam asserted, however, that Higgins had breached its duty in failing to explain the 80% co-insurance clause to him. The trial court determined that in order to meet his burden of proof, Aslam needed to present expert testimony to establish an insurance broker’s standard of professional care and whether Sink, as an agent of Higgins, breached that standard.

Aslam failed to file an expert report. Higgins filed a motion for summary judgment, which the court granted. Aslam appealed.


Whether the lower court committed an error of law or abused its discretion by granting the appellee’s motion for summary judgment because of the lack of expert testimony on the issue of whether the appellant insurance agency acted negligently or breached its fiduciary duties when such issues are not so complex as to require the need for opinion testimony from an expert?


Aslam has asserted negligence and breach of fiduciary duty claims against Higgins for failing to explain the 80% co-insurance clause. Aslam also argued that insurance is not so highly technical a field that the average layperson cannot understand the general nature of an insurance broker’s responsibility to its insured.

In Pennsylvania, expert testimony is necessary to establish negligent practice in any profession. When dealing with the higher standards attributed to a professional in any field, a layperson’s views cannot take priority without guidance as to the acceptable practice in which the professional must operate.

Generally, the determination of whether expert evidence is required or not will turn on whether the issue of negligence in the particular case is one which is sufficiently clear so as to be determinable by laypersons or concluded as a matter of law, or whether the alleged breach of duty involves too complex a legal issue so as to warrant explication by expert evidence. Here, the underlying question of whether insurance agent malpractice occurred revolves around an insurance agent’s duty and responsibility in connection with representing a client in an insurance transaction. At issue is not the simplicity of the transaction but the duty and degree of care of the insurance agent or broker.

The trial court determined that Higgins’ alleged duty to Aslam, to obtain appropriate property insurance for a multi-dwelling apartment building in a limited market that included Pennsylvania’s Fair Plan, following Old Guard’s (the prior insurer) notice of non-renewal, was not an elementary and non-technical transaction. The court found the issue raised questions of fact outside the normal range of the ordinary experience of a layperson.

The standards of practice and skills of an insurance broker are not necessarily matters of common knowledge. Under Pennsylvania law an insurance broker must exercise degree of care that reasonably prudent businessperson in brokerage field would exercise under similar circumstances. An insurance broker (like Higgins) and agent (such as Sink) are viewed as possessing expertise in the insurance industry. Therefore, in this instance, Aslam’s failure to produce an expert report as to the standard of care under which Sink should have conducted himself and as to any deviation from that standard that may have occurred renders Aslam’s case defective as a matter of law. Although the appellate court recognized that not all cases of negligence against insurance brokers will require expert testimony on the broker’s duty of care, the trial court decision to require expert testimony in this case was not an abuse of discretion.

Failure of a non-moving party to adduce sufficient evidence on an issue essential to his case and on which it bears the burden of proof establishes the entitlement of the moving party to judgment as a matter of law.


Insurance agents and brokers are members of a profession. If they fail to meet the custom and practice of the profession they can be held responsible for negligence. Since Mr. Aslam and his lawyers failed to present expert testimony – after being given the opportunity by the trial court, only two possibilities are raised: (1) they could not find an expert who would say that the agent was negligent or (2) the agent acted properly. The latter makes sense since Aslam, because of multiple losses, was non-renewed and could not obtain insurance in any market other than the FAIR Plan, a creature of the state designed to insure those who are basically uninsurable in a true insurance marketplace. That they were able to get $500,000 in coverage may have been a miracle for which work the agent’s good work was honored with a law suit.

    By Barry Zalma, Attorney and Consultant

Reprinted with Permission from Zalma on Insurance, (c) 2013, Barry Zalma.

Barry Zalma, Esq., CFE, is a California attorney who limits his practice to consultation regarding insurance coverage, insurance claims handling, insurance bad faith and fraud and acting as a mediator or arbitrator on insurance disputes. Mr. Zalma serves as a consultant and expert almost equally for insurers and policyholders. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. He recently published the e-books, "Zalma on Rescission in California - 2013"; "Random Thoughts on Insurance" containing posts from this blog; "Zalma on Insurance;" "Murder and Insurance Don't Mix;" “Heads I Win, Tails You Lose — 2011,” “Zalma on Diminution in Value Damages,” “Arson for Profit” and “Zalma on California Claims Regulations,” and others that are available at Zalma Books.

Mr. Zalma can be contacted at Barry Zalma or, and you can access his free "Zalma on Insurance Fraud" newsletter at Zalma’s Insurance Fraud Letter.

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