Can an insurance broker be liable for breach of fiduciary duty and negligent misrepresentation? Stated differently, can an insurance broker be liable for these claims even if the insurance broker has been found not to be liable for the negligent failure to procure insurance? Well, a recent appellate decision out of Florida’s 5th District Court of Appeals, confirms yes, with such claims being BROADER CLAIMS with BROADER DAMAGES than the negligent failure to procure coverage.
In Brown & Brown of Florida, Inc. v. Houligan’s Pub & Club, Inc., 51 Fla.L.Weekly D49b (Fla. 5th DCA 2026), this is exactly what transpired when a jury found an insurance broker not liable for negligent failure to procure insurance, but liable for breach of fiduciary duty and negligent misrepresentation. On appeal, the broker did not appeal its liability for these counts, rather, it appealed the measure of damages for these counts.
In contrast [to a negligent failure to procure insurance], breach of fiduciary duty and negligent misrepresentation are potentially broader claims that are not necessarily yoked to the existence of a specific insurance policy. In this regard, Florida law recognizes separate causes of action for breach of fiduciary duty and negligent misrepresentation; each is a distinct theory of recovery. The supreme court has said that the existence of a fiduciary relationship does not prevent a jury “from considering both a breach of fiduciary duty claim and a negligence claim.” Wachovia Ins. Servs., Inc. v. Toomey, 994 So. 2d 980, 990 (Fla. 2008) (“Under Florida law, negligence claims and breach of fiduciary duty are separate causes of action. Indeed, insurance brokers will often have both a fiduciary duty to their insured-principals and a common-law duty to properly procure requested insurance coverage.”). For this reason, “negligence and breach of fiduciary duty can be pled in the alternative.” Id.
Notably, this Court has held that proof of available coverage is not required for claims of breach of fiduciary duty or negligence. In E&R Environmental Services, LLC v. Sihle Financial Services, Inc., the trial court ruled that the unavailability of insurance in the marketplace defeated these types of claims against the insurer. 396 So. 3d 624, 628 (Fla. 5th DCA 2024). In reversing, this Court held that “even if coverage was not available in the marketplace — as [the insurance broker] maintains — that fact would not necessarily be fatal to [plaintiff’s] complaint.” Id. at 629.
An insurance agent or broker who agrees or undertakes to procure certain insurance coverage owes his principal a duty to do so within a reasonable time. When the agent fails to do so, even if the agent is not to blame for the failure, he may nevertheless become liable for damages if he fails to inform his principal that the requested insurance has not been procured.
Applying this principle, a reasonable jury could find that even if the insurance [the plaintiff] wanted was unavailable in the marketplace, [the insurance broker] should have timely notified [the plaintiff] so that [the plaintiff] could consider its alternatives.
Id. (internal citations omitted). On this basis, this Court concluded that the trial court “erred by concluding that the unavailability of coverage — even if true — was dispositive of E&R’s claims.” Id.
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The decision in E&R applies directly to claims for breach of fiduciary duty and no apparent reason exists for not applying it to a negligent misrepresentation claim. It would have been improper, however, to limit Brown & Brown’s potential liability under the fiduciary duty and negligent misrepresentation claims to the existence of an insurance policy in the marketplace when a broader measure of damages, if proven, is allowable.
Brown & Brown, supra.
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.
