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ALTHOUGH NO SPECIAL RELATIONSHIP EXISTED BETWEEN BROKER AND PLAINTIFF, CAUSE OF ACTION BASED UPON PLAINTIFF’S SPECIFIC REQUEST FOR FLOOD INSURANCE (WHICH WAS NOT INCLUDED IN THE POLICY) SURVIVED SUMMARY JUDGMENT.

The Fourth Department determined summary judgment was properly awarded to the insurance broker (First Niagara) because no special relationship existed with plaintiff. Plaintiff specifically asked defendant whether plaintiff had flood insurance and further stated plaintiff wanted flood insurance. Defendant never responded. After flood damage occurred plaintiff learned the policy did not include flood insurance. Although no special relationship existed, plaintiff’s cause of action based upon the specific request for flood insurance survived summary judgment:

“As a general principle, insurance brokers have a common-law duty to obtain requested coverage for their clients within a reasonable time or inform the client of the inability to do so” … . “Absent a specific request for coverage not already in a client’s policy or the existence of a special relationship with the client, an insurance agent or broker has no continuing duty to advise, guide[ ] or direct a client to obtain additional coverage” … . “[A] special relationship may arise where (1) the agent receives compensation for consultation apart from payment of the premiums . . . (2) there was some interaction regarding a question of coverage, with the insured relying on the expertise of the agent . . . ; or (3) there is a course of dealing over an extended period of time which would have put objectively reasonable insurance agents on notice that their advice was being sought and specially relied on’ “… .

Here, First Niagara met its initial burden of establishing that no special relationship existed, and plaintiff failed to raise a triable issue of fact  … . Specifically, First Niagara submitted evidence that it received no compensation from plaintiff over and above the commissions it received for the insurance policies it had procured, that plaintiff did not use First Niagara as its exclusive agent, and that plaintiff retained final decision-making authority over what coverage to obtain … . Thus, even accepting plaintiff’s allegations as true, we conclude that “the record in the instant case presents only the standard consumer-agent insurance placement relationship” … .

We further conclude, however, that First Niagara failed to tender “sufficient evidence to eliminate any material issues of fact from the case” relating to plaintiff’s specific request for flood insurance coverage … . … [T]here are triable issues of fact concerning whether plaintiff made a specific request for flood insurance coverage prior to the flood event … . Petri Baking Prods., Inc. v Hatch Leonard Naples, Inc., 2017 NY Slip Op 05338, 4th Dept 6-30-17

 

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