Broker Cannot Be Held Liable for Fraudulent Commercial Property Coverage, 7th Cir. Rules

CHICAGO — Negligence claims asserted against an insurance broker in a case involving fraudulent commercial property policies fail because the broker did not owe a duty of care to the companies asserting the claims, a federal appeals court has ruled.

In a Jan. 4 opinion, the 7th Circuit U.S. Court of Appeals explained that broker Norman-Spencer Agency Inc. cannot be held liable for the fraudulent insurance transaction because there is no evidence that any broker in the procurement chain ever requested that Norman‐Spencer serve as a sub‐broker to procure the coverage.

In 2011, Western Consolidated Premium Properties Inc. (WCPP) and …