Agent’s Failure to Advise Need for Substantial Ordinance and Law Coverage Breaches Duty Owed to Insured

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Foy Insurance Group, Inc. (Foy) appealed a verdict finding that Foy was negligent for failing to advise Ocean to purchase sufficient insurance coverage to rebuild a hotel, damaged in a 2015 fire, in compliance with the current building code and awarding damages to Ocean. In 101 Ocean Blvd., LLC v. Foy Insurance, Supreme Court Of New Hampshire (March 19, 2021) the Supreme Court established how the Plaintiff Established the special relationship to hold an agent liable to an insured for inadequate coverage.

ZALMA OPINION

The actions of Foy and its employees set up a special relationship with Ocean, even to the point of advising him to use a different agent who obtained better coverage than that that Foy could obtain, advised Ocean of limits to obtain, and coverages to obtain for Ocean’s multiple properties. Agents and brokers must be exceedingly careful in the advice given when there is a special relationship and should have known coverage was inadequate for a hotel more than 100 years old.