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Allegation of negligence by insurance brokers requires expert opinion to establish duty of care



It is not uncommon for an insured person to choose the minimum required uninsured or underinsured car insurance to save money. Only after an accident, with 20/20 in retrospect, does the insured understand the need for higher limits. When the damage is serious and the limits are insufficient, the agent is always sued for not having obtained sufficient limits.

Such was the case in Omar Alabassi v. T.I.B. Insurance Brokers, Inc ., No. 19-1183, United States Court of Appeals for the Tenth Circuit (September 17, 2020) when the plaintiff, Omar Alabassi, was covered by insurance obtained through T.I.B. Insurance Broker (“TIB”). He was involved in a hit-and-run collision with another driver who fled the scene.

Alabassi brought an action for negligence against TIB, claiming that TIB did not meet his standard of care in (1

) and provided him with adequate insurance cover. and (2) prepare and submit their insurance application. The district court issued a summary judgment in favor of TIB because Alabassi failed to present expert testimony that TIB violated its duty of care.

FACTS

Alabassi drove his personal vehicle to pick up a customer at Denver International Airport. Prior to the accident, TIB Alabassi sold a commercial car insurance policy issued by Columbia Insurance that covered both Alabassi and his limousine business. TIB informed Alabassi about which insurance to buy and then helped Alabassi prepare and submit his insurance application.

The insurance application contained a Colorado Coverage Selection Form, which enables the insured to choose the amount of uninsured car insurance to be covered. through his policies. Alabassi chose the minimum coverage required by Colorado law, but he also marked a $ 50,000 single coverage box. Alabassi claimed that these two alternatives were in conflict.

After the accident, Alabassi claimed that he suffered more than $ 86,000 in medical expenses, but Columbia Insurance offered him only $ 55,000. Alabassi claimed in his complaint that TIB was negligent. At the trial, TIB raised a summary assessment on the grounds that Alabassi had failed to offer an expert opinion which established significant elements of his negligence.

ANALYSIS

The parties propose, without any reference to the precedent of the circuit, that the tenth circuit review grant a summary judgment for failure to present expert opinions for abuse of discretion. Since there was no need to determine the appropriate review standard to be applied in this case, as it established that the district court correctly had a competent expert opinion.

In order to succeed in a claim for negligence, a plaintiff must show that the defendant has violated an obligation owed to the plaintiff and thereby caused the plaintiff's damages. When a claim for negligence is based on an allegation that a professional was negligent, the plaintiff must show that the practitioner's conduct fell below the standard of care associated with that profession. For those who practice a profession that involves specialized knowledge or skill, reasonable care requires that the actor has a standard minimum of special knowledge and ability that matches the members of the profession in good standing. In such cases of professional negligence, expert opinion is usually necessary to help the fact seeker determine the applicable standard of care, as such standards in most cases do not fall within the reach of ordinary people.

The standard of care in this case is based on TIB's determination of the right insurance for Alabassi – a determination that requires knowledge of conditions and practices that are specific to the insurance industry. An ordinary person, even an experienced judge, would not understand how a reasonably prudent insurance broker would determine the right policy for a client or whether TIB's behavior was compatible with these methods.

Alabassi chose the minimum coverage required by Colorado law. Colorado law requires coverage of at least $ 25,000 for one person and $ 50,000 for two or more people in an accident. Because knowledge of terms specific to the insurance industry is needed to determine if the Colorado minimum requirement violates a single $ 50,000 limit, the district court needed expert opinion to resolve the issues.

Expert testimony was required to determine if the options selected were in Alabasi's insurance application were inconsistent. No specialized or technical knowledge was required to establish that in these circumstances the insurer did not act in good faith. Conversely, in this case, Alabassi's allegations that TIB was negligent were based on an understanding of terms and practices outside the general knowledge and experience of ordinary people. Thus, the district court did not err in deciding that an expert opinion was required.

When a professional – an insurance agent or broker, a doctor, a lawyer, an architect, an insurer or an accountant – is sued for breach of his or her duty of care (negligence), it is the plaintiff's duty to first prove the professional's duty of care and that the duty has been infringed and that the infringement caused the plaintiff damage. In order to establish a duty of care for a professional, such as TIB in this case, an expert witness is required to explain to the actual trial (a judge or jury) what the obligation was and whether it was violated by the professional acting outside the custom and


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to employment as an insurance consultant specializing in insurance coverage, insurance management, insurance sentiment and insurance fraud almost equally for insurers and policyholders. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award.

For the past 52 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claims staff to become insurance claims staff.

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