The Illinois Appellate Court found that an insurance agent was liable under both a state statute and common law for failure to obtain coverage requested by the insured. Skaperdas v. Country Cas. Ins. Co., 2013 Ill. App. LEXIS 711(Ill.Ct. App. Oct. 7, 2013).
The insured's girlfriend was added to his policy as an additional driver. The insured then asked the insurance agent for Country Casualty Insurance to adding his girlfriend and her son to the policy. Effective February 14, 2009, the insured purchased an auto policy through the agent. The declarations page listed only the insured, but identified the driver as a "Female, 30-64."
In July 2009, the girlfriend's son was seriously injured when he was struck by a vehicle while on his bicycle. A settlement was reached with the other driver for his policy limits of $25,000. Because this was insufficient to pay for the boy's injuries, a claims for under-insured motorist benefits was made under the Country Casualty policy. The claim was denied because neither the girlfriend nor her son were listed as a named insured on the policy.
Plaintiffs sued both Country Casualty and the agent. The agent filed a motion to dismiss, arguing he did not owe plaintiffs a duty of care in procuring insurance coverage. Country Casualty also filed a motion to dismiss. The trial court granted both motions. Because an agent rather than a broker was involved, the agent did not owe plaintiffs a duty of care in procuring insurance coverage.
The appellate court reversed. A state statute provided that "An insurance producer . . . shall exercise ordinary care and skill" in procuring insurance coverage. "Insurance producer" was not defined by the statute. The court determined that any person required to be licensed to sell, solicit, or negotiated insurance had a duty to exercise ordinary care in procuring insurance. There was no distinction in the statute between an insurance agent or insurance broker. The court noted that this position was generally accepted, citing Couch on Insurance. An agent or broker could be liable for breach of contract or for a tort in negligently failing to perform a duty imposed by the contract.