The Second Circuit reversed the district court’s dismissal of a negligence claim against the insured’s broker for failure to give notice to the insurer. Paro Management Co., Inc. v Willis of New Jersey, Inc., 2025 U.S. App. LEXIS 29289 (2nd Cir. Nov. 5, 2025).

Paro Management Company, Inc. sued its insurance broker, Willis of New Jersey, Inc,, for failing to deliver to Paro’s insurer a notice regarding the presence of lead paint on Paro’s residential property. Paro’s complaint alleged that it instructed Willis to convey the notice to its insurer and Willis promised to do so but did not follow through. Former tenants later sued Paro for damages arising from exposure to lead paint, and Paro’s insurer disclaimed coverage on the ground that it had not been timely notified of the lead paint issue. Paro then sued the insurer seeking a declaration of coverage. Both the former tenants’ lawsuit and the coverage action were pending in New York state court.

Paro subsequently brought this action against Willis, asserting claims under New York law for negligence and negligent misrepresentation. The district court dismissed the complaint without prejudice as unripe and, in the alternative, for failure to state a claim.

Regarding ripeness, the district court referenced the two pending state-court cases and reasoned that Paro sought “relief against Willis because [Paro] may be found liable for exposing the tenants to lead paint, and [Paro’s] insurer may succeed in denying coverage on the ground that it was never notified of the presence of the lead paint.”

The appellate court disagreed. Paro alleged that the policy covered claims for loss arising out of a pollution incident up to the $10,000,000 policy limit. Willis’s failure to convey the lead-paint notice to the insurer allegedly caused the insurer to disclaim coverage for the damages sought in the lead-paint lawsuit prompting Paro to sue the insurer for a declaration of coverage. The costs Paro incurred in litigating the coverage action constituted injury allegedly caused by Willis’s negligence.

The district court also concluded that the complaint failed to state a claim for negligence because it did not adequately allege that Willis owed a duty to Paro to give the lead-paint notice to the insurer. Under New York law, a broker generally owed the insured no more than the common-law duty to procure the insurance coverage that the insured requested. However, if an insured asked the broker to take on additional responsibilities above and beyond procuring specifically requested coverage, and the broker agreed to do so, a duty was created that the broker had to execute with reasonable care.

Here, the complaint adequately alleged that Willis had a duty to transmit the lead-paint notice to the insurer. The allegations, if true, would establish that Paro asked Willis to take on an additional responsibility above and beyond procuring coverage and that Willis agreed to do so. That agreement imposed on Willis a duty to notify the insurer, a duty Willis had to execute with reasonable care. Under New York law, the complaint adequately alleged that Willis owed Paro a duty to give the lead-paint notice to the insurer based on Paro’s instruction to convey the notice and Willis’s representations that it would do so. Paro stated a claim for negligence.

The claim for negligent misrepresentation failed, however. The complaint alleged that Willis “never provided the notice it represented that it would provide.” But the complaint did not allege that Willis made these representations with the intention of never conveying the notice to the insurer. Willis’s promissory statements were thus not actionable as a negligent misrepresentation.

The judgment of the district court was affirmed as to its dismissal of the negligent-misrepresentation cause of action for failure to state a claim. The judgment was reversed as to the district court’s dismissal of the complaint as unripe and its dismissal fo the negligence clause of action for failure to state a claim.