QUESTION OF FACT WHETHER THERE EXISTED A SPECIAL RELATIONSHIP BETWEEN PLAINTIFFS AND DEFENDANT INSURANCE BROKER SUCH THAT THE BROKER COULD BE LIABLE FOR THE FAILURE TO PROCURE ADEQUATE COVERAGE FOR A DEMOLITION PROJECT (FIRST DEPT).
The First Department, reversing Supreme Court, determined there is a question of fact whether a special relationship existed between plaintiffs and defendant insurance broker, thereby making the broker liable for the failure to procure adequate coverage for a demolition contract:
Issues of fact exist as to whether a special relationship arose between plaintiff STB Investments Corporation and its managing agent plaintiff 303 West 42nd Street Realty Co. (plaintiffs), on the one hand, and defendant insurance broker, on the other, that imposed on defendant a duty to advise plaintiffs as to insurance coverage that would have included the loss arising from plaintiffs’ demolition project … . Plaintiffs contend that the special relationship arose from an interaction with defendant in which they relied on defendant’s expertise as to coverage. There is evidence that plaintiffs’ property manager, who allegedly had never before purchased insurance for a demolition project, requested that defendant obtain adequate coverage for that particular risk, and that defendant agreed to do so, reviewed the demolition contract as part of its efforts, and discussed with plaintiffs the demolition contractor’s coverage in the larger context of determining the appropriate level of coverage to obtain for plaintiffs … . STB Invs. Corp. v Sterling & Sterling, Inc., 2019 NY Slip Op 08606, First Dept 12-3-19
