Georgia insurance brokers and agents are sounding the alarm—and perhaps checking the
ir own errors and omissions coverage—after a recent state appeals court ruling opened the door for third parties to sue when full coverage is not secured.
“This ruling fails to understand the insurance buying process and is disastrous for agents a
nd the industry,” said Michael Iverson, a commercial agent and former president of the Independent Insurance Agents of Georgia.
Iverson was speaking of a May 13 decision from the Court of Appeals of Georgia, which, for the
first time, allows insureds to assign claims to people who are not on the policy but who may have been injured at the insured property.
The opinion in Plummer vs. Commercial Insurance Agency, if it’s not overturned by the state Su
preme Court, essentially m
eans that a carrier could correctly deny coverage, but a broker or agent could still be held liable, said attorney Kayla McCallum, of Atlanta, with the Swift Currie law firm, which was not involved in the litigation.
“Agents need to continue to make sure they are communicating with potential clients about coverage, and documenting the requests,” McCallum said. “Make sure you have it in writing about what type of coverage is requested.”
Attorneys for the defendant insurance agency, with the Andersen Tate Carr law firm, have already moved to ask the state Supreme Court to review the ruling. The high court may not make a decision on that for weeks.
The unprecedented decision stems from a shooting at a neighborhood store in Eas
t Atlanta, DeKalb County, in 2019. Stephanie Plummer’s husband, Ja’Marcus Holloway, was killed, and Plummer filed a premises liability suit against the store owner, Henry Properties Inc., or HPI.
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Commercial Insurance Agency Inc. had acted as the insurance broker for the store, obtaining a commercial liability policy through Colony Insurance, the appeals court explained.
Colony denied coverage. In 2021, the carrier secured a judgment from the federal court in north Georgia declaring that a policy exclusion barred coverage for injuri
es resulting from assault, battery or firearms. So, the store owner sued the insurance broker, known as CIA, charging that the agency should have known it was not recommending adequate coverage for the situation.
The widow, Plummer, settled with HPI. As part of that settlement, HPI assigned its claims against the insurance broker to Plummer. Plummer’s attorneys, from th
e national firm of Morgan & Morgan, argued that CIA was guilty of negligence and breach of fiduciary duty by failing to obtain a policy or endorsement that would have covered shooting injuries at the store.
A lower court in DeKalb County sided with the insurance broker, finding that the claim was a personal tort, and personal torts are not assignable under Georgia law. The widow appealed, and the appellate judges agreed with her, deciding for the first time in Georgia litigation that the assigned claim was, in fact, a property claim.
