American Building Supply Corp. v. Petrocelli Group, Inc.

Summary

The New York Court of Appeals held that an insured may maintain negligence and breach-of-contract claims against an insurance broker for failing to procure specifically requested coverage, even when the insured received the policy without reading or objecting to it. The failure to read the policy may support comparative negligence but does not categorically bar recovery where factual issues exist regarding the specific coverage requested and the broker’s failure to obtain it.

Holdings

1. An insured may maintain negligence and breach-of-contract claims against an insurance broker when issues of fact exist as to whether the insured specifically requested particular coverage and whether the broker failed to procure that coverage.
2. An insured's failure to read and understand the policy after receiving it, without lodging a complaint, does not constitute an absolute bar to recovery against the broker under the circumstances presented.

Questions Presented

1. Whether an insured may maintain negligence and breach-of-contract claims against an insurance broker when factual issues exist regarding a specific request for coverage that the broker allegedly failed to procure.
2. Whether the insured's receipt of the policy without reading it or complaining about its terms absolutely bars recovery against the broker.

Disposition

reversed