New Jersey federal court reaffirms that, absent special circumstances, an insurer does not owe a fiduciary duty to an insured.

In a coverage dispute encompassing several claims, an insured alleged its insurer breached its fiduciary duty. The court acknowledged there are circumstances where an insurer owes a fiduciary duty, but it recognized that these are limited. For example, when “an insurer, acting as an agent to the insured when settling claims, owes a fiduciary duty,” and “an insurance company owes a duty of good faith to its insured in processing a first-party claim.” Without these types of special circumstances, a claim for breach of fiduciary duty cannot survive when the parties are acting in a normal contractual posture.

^{Case Law Alerts, 4th Quarter, October 2017}

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