.

What's Hot in Workers' Comp

TOP 10 DEVELOPMENTS IN NEW JERSEY WORKERS’ COMPENSATION IN 2024

What’s Hot in Workers’ Comp, Vol. 28, No. 12, December 2024

December 1, 2024

by Kiara K. Hartwell

1.    The Appellate Division addresses permanent partial vs. total disability.
Hughes v. Port Auth. of N.Y. & N.J. and State of N.J. Second Inj. Fund, No. A-1188-22 (January 30, 2024)

The Appellate Division affirmed the workers’ compensation order for an increase in the petitioner’s permanency award but denied his claim that he was permanently and totally disabled. The petitioner suffered a cardiac injury on July 14, 2004. He filed a claim, and after a trial in which he asserted he was 100% disabled, a workers’ compensation judge found he was 33 1/3% disabled. The petitioner then re-opened his claim and joined the Second Injury Fund into the litigation. The only issue at trial was whether there was any increase in permanent disability as a result of the July 14, 2024, cardiac event. After trial, which included testimony from the petitioner and experts for both sides, and review of medical records, the judge found the petitioner’s disability increased to 45% but that he was not totally disabled. The petitioner appealed, arguing he should have been found 100% disabled. The Appellate Division noted the judge thoroughly laid out the evidence and reasoning for his decision. While the petitioner argued the judge should have given more weight to his expert’s opinion, the judge explained his reasons for rejecting same. 

2.    The Appellate Division addresses pro se claim for medical and temporary benefits.
Bello v. United Panam Financial Corp., No. A-2986-21 (March 6, 2024)

A pro se petitioner appealed from a workers’ compensation order finding that his injuries were not causally related to his employment. The petitioner filed two claims, both seeking medical and temporary benefits from the respondent. He testified he had to use his own car for work and had it serviced at Holman Cadillac, noting he noticed a chemical order in his car after it was serviced. A week later, he turned on the air conditioner and noticed a stronger odor. He turned it off, stopped to see a client and then stopped at a restaurant to rinse his mouth, at which point he started coughing up blood. The petitioner hired Eagle Industrial Hygiene Associates to test the air quality in his car. In their report, they noted they detected an odor after operating the air conditioner for 1.5 hours and that the products used for his car included some dangerous components. The petitioner retained Dr. Lawrence Guzzardi as his expert, who acknowledged he was not treating patients, had not been affiliated with any hospital since 2016 and most of his income came from his real estate business. Dr. Guzzardi opined the petitioner’s injuries were due to exposure to the chemicals. In response, the respondent offered up the testimony of Dr. Howard Kipen (toxicologist) and Dr. Samuel Kahnowitz (pulmonologist), both of whom found no causal link between his symptoms and the alleged exposure. Afterwards, the judge issued an extensive written decision, finding the respondent’s experts were more credible and, thus, the petitioner failed to establish causation. The Appellate Division found no basis to disturb the judge’s decision, especially as both of the respondent’s experts provided the reasons for their conclusions.

3.    The Appellate Division finds no requirement that a lien had to be paid immediately following settlement with a third-party tortfeasor under N.J.S.A. 34:15-40.
N.J. Transit Corp. v. Joseph, No. A-1194-22 (March 19, 2024)

The Appellate Division vacated and remanded a trial court order denying New Jersey Transit’s application for satisfaction of its workers’ compensation lien as premature after the third-party settlement. The petitioner was injured while working for New Jersey Transit and filed workers’ compensation and third-party cases. While the workers’ compensation case was pending, the petitioner settled with his UM carrier, and those funds were disbursed to him. New Jersey Transit filed a verified complaint and order to show cause, seeking reimbursement of its lien. The trial court denied their application as premature, without hearing oral arguments. The Appellate Division reviewed N.J.S.A. 34:15-40, noting there was no mention of a timeline for satisfying an unperfected lien. In addition, there was no mention of a requirement that a lien had to be paid immediately following settlement with a third-party tortfeasor; instead, it could not be fully satisfied until the workers’ compensation case was finalized and the employer’s liability determined. The case was remanded to the trial court to ensure the lien was protected until the workers’ compensation case was resolved.
 
4.    The Appellate Division affirms dismissal of a workers’ compensation claim as outside the scope of employment. 
Latshaw v. Lakewood Twp. Police Dep’t, No. A-3702-21 (March 25, 2024)

The petitioner was working for the employer as a dispatcher, and while on her meal break in October 2018, she was rear-ended. She filed a workers’ compensation claim, and the employer opposed, arguing she was injured outside the scope of her employment. The petitioner testified that she had employer-approved breaks, including for lunch, and that she was paid for that time, even if she left the premises. She had driven to a restaurant for lunch and was injured on her way back to the station. The employer moved to dismiss her claim as the accident occurred while on a personal errand, and the judge granted same. The Appellate Division referenced the Supreme Court decision in Keim v. Above All Termite & Pest Control, 256 N.J. 47 (2023). Applicable case law and statute were reviewed in defining employment and exceptions, including the premises rule, special mission rule, paid travel time rule and authorized vehicle rule. In going through these exceptions, the Appellate Division emphasized that the petitioner was not covered under any of these exceptions and noted the petitioner’s paid status during her break did not mandate workers’ compensation coverage. The Division affirmed dismissal of the claim.

5.    The Appellate Division addresses compensability for a circumstance involving mandatory reporting by the employer.
Terhune v. Port Auth. of N.Y. & N.J., No. A-3206-22 (May 8, 2024)

The petitioner worked for the employer, and on December 14, 2013, reported for mandatory snow duty. As a part of same, he had to stay at an assigned Marriot Hotel for 12 hours and work the other 12 hours. He was compensated for the entire 24-hour shift. The petitioner had a pre-existing back injury, requiring light exercise. After using the hotel gym, he slipped and landed on his back as he was entering the hotel pool. The incident was reported, and the petitioner was taken to the hospital. Although the respondent denied the claim, arguing it did not arise out of his employment, the judge found the employer required the petitioner to remain at the hotel and all expenses were paid by the employer. The judge found the case compensable and entered a final decision and judgment for 75% permanent disability. The Appellate Division rejected the employer’s appeal consistent with the judge’s reasoning.

6.    The Appellate Division reviews the Workers’ Compensation Act bar.
Barrett v. Hackensack Univ. Med. Ctr., No. A-3441-22 (June 13, 2024)

The Appellate Division reversed and remanded the trial court’s order granting the employer’s summary judgment motion. The petitioner finished her overnight shift, clocked out, and accompanied her son in the respondent’s emergency room. Her son was discharged about three-and-a-half hours later. While walking to her son’s car in the garage, the petitioner tripped and fell. She filed a case against the employer, who filed a summary judgment motion. The judge granted the motion, noting the Workers’ Compensation Act barred her from suing the respondent as she never left the premises after her shift ended. The Appellate Division reversed and vacated the order, noting the petitioner was not in the course of and did not arise out of her employment when the incident occurred.

7.    The Appellate Division addresses coverage in a workers’ compensation and third-party setting.
Tejada v. 74 Industries, Inc., et al., No. A-2643-21 (July 12, 2024)

The insurance carrier issued a standard workers’ compensation and employers liability policy to the respondent. The petitioner was injured at work and filed a workers’ compensation claim, which was resolved through an order approving settlement with dismissal (Section 20). The petitioner also filed a complaint for intentional torts against the respondent, who, in turn, filed a third-party complaint against their insurance carrier, seeking coverage. At the time of the workers’ compensation settlement, there was no reference to the petitioner’s complaint in the Law Division. The petitioner’s complaint alleged intentional wrongs within the exception of the workers’ compensation bar. The respondent then tendered the complaint to their carrier for defense and indemnification, which the carrier declined. The judge granted the insurance carrier’s motion, noting its policy clearly excluded intentional wrongs from coverage. The Appellate Division confirmed the exclusion and policy language were unambiguous in excluding coverage for intentional wrongs and affirmed. 

8.    The Appellate Division analyzes the special employer rule.
Urena v. A&D Freight Logistics, LLC, et al., No. A-2302-21 (July 29, 2024)

Hartford Underwriters Insurance appealed from a February 15, 2022, order denying its motion to dismiss for lack of coverage. A&D Freight cross-appealed from the January 19, 2022, and February 15, 2022, orders, which found it was liable for dependency benefits as the decedent’s employer. The underlying claim resulted from a fatal accident involving the decedent on March 31, 2017. The decedent was the owner-operator of Triple Star Transport, LLC and was assigned to transport materials by A&D Container Logistics and A&D Freight. Triple Star was insured by Hartford; A&D Container was insured by New Jersey Casualty Insurance Company (NJCIC); and A&D Freight was insured by New Jersey Property Liability Insurance Guarantee Association (NJPLIGA). The petitioner (decedent’s wife) filed dependency claims against all three companies and their insurers, which were later amended to include NJM as A&D Container’s insurer. After trial, the judge found Hartford did not cancel its policy per the statute and that all three companies were liable to pay dependency benefits under the theory of dual employment. The Appellate Division found Hartford failed to provide proof that there was personal knowledge of the notice of cancellation being sent to the employer. As such, Hartford failed to meet its burden of proper cancellation. As for the special employer argument, the Appellate Division rejected same, noting the three factors to establish the special employee relationship was present (contract of hire, work essentially that of a special employer and right to control). As such, the Appellate Division affirmed the order denying Hartford’s motion to dismiss for lack of coverage and finding A&D Freight liable for dependency benefits as the decedent’s special employer.

9.    The Appellate Division reviews the intentional wrong exception.
Busby v. Seabrook Bros. & Sons, No. A-1925-21 (August 5, 2024)

The petitioner began working for the employer in January 2017. In April 2017, he injured his right hand while cleaning a commercial mixing machine. The petitioner filed a personal injury action against the respondent, alleging substantial certainty of harm due to removal of the machine’s guard and failure to train the petitioner. The employer moved for summary judgment. After oral arguments, the judge rendered an oral opinion granting the motion. The court found the employer did not engage in any deliberate acts that led to the petitioner’s injury and that their failure to train and to have lockout procedures in place were more akin to negligence. There was also a lack of any prior injuries on Line 9. The Appellate Division affirmed, noting there was no intentional or fraudulent deception by the employer and that the petitioner was injured when Line 9 was unexpectedly activated. 

10.    S2822/A3986 signed into law.

On August 22, 2024, Acting Governor Nicholas Scutari signed S2822/A3986 into law. Under R.S.34:15-64, the attorney fee cap in workers’ compensation cases were at 20%. This bill amends the statute to raise the attorney fee cap in workers’ compensation cases to 25%. This also impacts fees on motions for medical/temporary benefits as well as permanency awards. The rationale behind the amendment was that the 20% fee cap did not account for the additional and increasing duties of workers’ compensation attorneys since the cap was established in 1927. This amendment is effective immediately and applies to all claims pending on or after enactment of the bill. As such, any fees awarded on motions and permanency awards may be subject to this increased fee cap as of August 22, 2024. However, the workers’ compensation judges still have discretion on all fees. 

 

What’s Hot in Workers’ Comp, Vol. 28, No. 12, December 2024 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2023 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

Firm Highlights

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict. 

empty courtroom photo

Result

Summary Judgment Secured for Life Insurance Agent

Thought Leadership

New Jersey Supreme Court Clarifies That Insurance Brokers, Producers, and Agents Are Not Exempt from Consumer Fraud Act Liability

On July 15, 2026, the New Jersey Supreme Court issued an opinion in James G. Lowe, M.D. v. Bernard Audet, wherein the Court addressed many prior conflicting opinions and held that insurance brokers, producers and agents are not exempt from the Consumer Fraud Act (“CFA”), N.J.S.A. 56:8-1, et. seq., under the “learned professional” exception as “semi-professionals” or otherwise.  This opinion reversed a decision from the trial court and Appellate Division where the trial judge determined that insurance brokers, producers, and agents are exempt.  The Supreme Court further indicates in a footnote “to the extent there is any distinction between insurance brokers, insurance producers, and insurance agents, none of those occupations are exempt from the CFA under any exception.” Plaintiff was a neurosurgeon who co-owned the medical practice he worked at, as well as several other unrelated businesses.  The defendants were insurance brokers and producers who marketed, sold, produced and procured policies to and for Plaintiff and his medical practice for thirteen years.  Such policies included loss related to disability.  The defendants failed to advise plaintiff that business interests that were not related to his medical practice may have an effect on any benefits claims.  However, plaintiff alleges he was advised by the defendants that, should he become disabled, he would receive maximum benefits under the policies. In 2021, plaintiff was diagnosed with a permanent vision condition that prevented him from performing neurosurgery.  When the claim was made for maximum benefits under the policies plaintiff purchased from the defendants, only partial benefits were paid due to the other business interests plaintiff was involved in that were unrelated to his medical practice.  Plaintiff filed suit against the defendants, which included a claim for violation of the CFA by negligently failing to obtain sufficient disability insurance for the plaintiff.  At the trial court level, the judge relied upon Plemmons v. Blue Chip Ins. Serv., Inc., 387 N.J. Super. 551 (App. Div. 2006) (holding that insurance brokers are “semi-professionals,” and are “excluded from liability under the CFA for the services they render within the scope of their professional licenses”), but acknowledged the competing appellate decision of Shaw v Shand, 460 N.J. Super. 592 (App. Div. 2019) (holding that the “learned professional” exemption is limited to “those professionals who have historically been recognized as ‘learned’ based on the requirement of extensive learning or erudition”).   The Supreme Court went through the history of opinions which addressed and set the standards for which the CFA applies and where there are exceptions for both “learned professionals” and “semi-professionals.”  Ultimately, the Court ruled that insurance brokers do not fall under either the learned professional or semi-professional exception, and that semi-professionals like insurance brokers, producers and agents are not exempt from the CFA. 

Result

Summary Judgment Secured, Preserving $750,000 in Coverage for Insured in Major Trucking Liability Dispute

Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

News

106 Marshall Dennehey Attorneys Recognized in the 2027 Editions of The Best Lawyers in America® and the Best Lawyers: Ones to Watch® in America

Marshall Dennehey is proud to highlight the firm’s 106 attorneys who have been recognized in the 2027 editions of The Best Lawyers in America® and the Best Lawyers: Ones to Watch® in America. Less than 6% of all practicing lawyers in the U.S. were selected by their peers for this recognition. Additionally, four of the firm’s attorneys received the Best Lawyers® 2027 “Lawyer of the Year” awards in their respective practice areas and demographic regions. Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. For more information, please visit https://www.bestlawyers.com/. OUR 2027 LAWYERS OF THE YEAR Harrisburg, PA Christopher Reeser, Personal Injury Litigation - Defendants Kacey Wiedt, Workers Compensation Law - Employers Roseland, NJ Justin F. Johnson, Medical Malpractice Law - Defendants Leonard Leicht, Personal Injury Litigation - Defendants   OUR 2026 BEST LAWYERS IN AMERICA Philadelphia, PA Nicholas D. Bowers, Personal Injury Litigation - Defendants Josh J. T. Byrne, Professional Malpractice Law - Defendants Jefferey J. Chomko, Insurance Law James H. Cole, Insurance Law John J. Delany III, Personal Injury Litigation - Defendants Laurianne Falcone, Personal Injury Litigation - Defendants John P. Gonzales, Employment Law - Management John Hare, Appellate Practice Daniel D. Krebbs, Personal Injury Litigation - Defendants Michele Punturi, Workers' Compensation Law - Employers Bradley D. Remick, Product Liability Litigation - Defendants Andrea Cicero Rock, Workers' Compensation Law - Employers Robin M. Romano, Workers' Compensation Law - Employers Daniel J. Ryan, Jr., Personal Injury Litigation - Defendants Gary M. Samms, Professional Malpractice Law - Defendants Christopher N. Santoro, Personal Injury Litigation – Defendants; Product Liability Litigation -Defendants Josh D. Scheets, Personal Injury Litigation - Defendants Robert P. Schenk, Workers' Compensation Law - Employers Robert E. Smith, Insurance Law Robin Snyder, Litigation - Health Care Michael L. Turner, Commercial Litigation; Criminal Defense: White-Collar; Mass Tort Litigation / Class Actions - Defendants Claire Breaux Ventola, Product Liability Litigation - Defendants Pittsburgh, PA Melissa Devich Cochran, Commercial Litigation; Mass Tort Litigation / Class Actions – Defendants; Product Liability Litigation - Defendants  John F. Deasy, Personal Injury Litigation – Defendants; Product Liability Litigation - Defendants Daniel W. Deitrick, Workers' Compensation Law - Employers Douglas C. LaSota, Litigation - Construction; Mass Tort Litigation / Class Actions - Defendants Joseph V. Lesinski, Product Liability Litigation – Defendants   Christian D. Marquis, Personal Injury Litigation - Defendants Patricia A. Monahan, Insurance Law; Litigation - Insurance Patrick T. Reilly, Commercial Litigation; Mass Tort Litigation / Class Actions – Defendants; Product Liability Litigation - Defendants Brett C. Shear, Medical Malpractice Law - Defendants Teresa O. Sirianni, Education Law; Employment Law – Management; Litigation - Labor and Employment Stuart Sostmann, Product Liability Litigation – Defendants Danielle M. Vugrinovich, Mass Tort Litigation / Class Actions - Defendants Scranton, PA Sarah E. Argo, Litigation - Insurance Michael J. Connolly, Personal Injury Litigation – Defendants; Professional Malpractice Law - Defendants Matthew Keris, Litigation - Health Care; Medical Malpractice Law - Defendants John T. McGrath, Jr., Insurance Law; Medical Malpractice Law – Defendants; Product Liability Litigation - Defendants William J. McPartland, Insurance Law John R. Nealon, Product Liability Litigation - Defendants Victoria Scanlon, Health Care Law; Litigation - Health Care; Medical Malpractice Law - Defendants Michael A. Sebastian, Workers' Compensation Law - Employers Thomas A. Specht, Insurance Law; Litigation - Insurance Suzanne Tighe, Litigation Insurance Harrisburg , PA Casey Alan Coyle, Administrative/Regulatory Law; Appellate Practice; Commercial Litigation Brittany E. Bakshi, Personal Injury Litigation - Defendants Shannon P. Fellin, Workers' Compensation Law - Employers Allison Krupp, Insurance Law John R. Ninosky, Litigation – Insurance; Personal Injury Litigation - Defendants Christopher Reeser, Personal Injury Litigation - Defendants Kacey Wiedt, Workers' Compensation Law – Employers King of Prussia, PA  Michael L. Detweiler, Construction Law Joseph L. Hoynoski III, Medical Malpractice Law - Defendants Gregory J. Kelley, Construction Law, Litigation - Construction Anthony Natale III, Workers' Compensation Law - Employers Francis X. Wickersham, Workers' Compensation Law - Employers A. Judd Woytek, Workers' Compensation Law – Employers Erie, PA Patrick M. Carey, Personal Injury Litigation - Defendants Joel M. Snavely, Health Care Law; Insurance Law New Haven, CT Michael Wrona, Commercial Litigation, Litigation - Bankruptcy  Mount Laurel, NJ David D. Blake, Litigation - Insurance Barbara Davis, Personal Injury Litigation - Defendants Lynne Nahmani, Litigation - Health Care John H. Osorio, Personal Injury Litigation - Defendants John L. Slimm, Legal Malpractice Law – Defendants; Professional Malpractice Law – Defendants Roseland, NJ Robert T. Evers, Medical Malpractice Law - Defendants Justin F. Johnson, Medical Malpractice Law - Defendants Julia Klubenspies, Medical Malpractice Law - Defendants Leonard C. Leicht, Personal Injury Litigation - Defendants Patricia M. McDonagh, Appellate Practice Sunny Sparano, Litigation - Construction Randall S. Watts, Health Care Law New York, NY Tonya M. Lindsey, Medical Malpractice Law - Defendants Tampa, FL Michael Archibald, Personal Injury Litigation - Defendants Lindsay G. McCormick, Litigation – Construction Orlando, FL Thomas F. Brown, Personal Injury Litigation - Defendants Dante C. Rohr, Commercial Litigation Fort Lauderdale, FL Kimberly Kanoff Berman, Appellate Practice Patrick M. Delong, Personal Injury Litigation – Defendants Jacksonville, FL  Heather Byrer Carbone, Workers' Compensation Law - Employers Linda Wagner Farrell, Workers' Compensation Law - Employers Elizabeth B. Ferguson, Litigation - Construction James P. Hanratty, Personal Injury Litigation – Defendants Wilmington, DE Sarah B. Cole, Litigation - Insurance Benjamin K. Durstein, Workers' Compensation Law - Employers Maria R. Granaudo, Medical Malpractice Law - Defendants  Keri L. Morris-Johnston, Workers' Compensation Law - Employers Cincinnati, OH Timothy B. Schenkel, Personal Injury Litigation - Defendants David E. Williamson, Personal Injury Litigation - Defendants Cleveland, OH Vincent E. Cononico, Litigation – Insurance, Personal Injury Litigation - Defendants Jillian L. Dinehart, Personal Injury Litigation - Defendants David J. Fagnilli, Insurance Law Jason P. Ferrante, Health Care Law, Litigation - Health Care Andrew H. Isakoff, Transportation Law Leslie M. Jenny, Litigation - Health Care; Medical Malpractice Law – Defendant OUR 2026 BEST LAWYERS: ONES TO WATCH Jacksonville, FL Sean J. Reeves, Personal Injury Litigation – Defendants; Product Liability Litigation - Defendants Orlando, FL Carolin A. Pacheco, Insurance Law Mount Laurel Stacey Gorin, Insurance Law Melville, NY Kimberly Gitlin, Personal Injury Litigation – Defendants Matthew A. Gray, Insurance Law; Personal Injury Litigation - Defendants Philadelphia, PA Holli K. Archer, Health Care Law; Medical Malpractice Law – Defendants; Professional Malpractice Law Emily Pritchyk, Commercial Litigation; Product Liability Litigation – Defendants Pittsburgh, PA Taylor E. Kosko, Mass Tort Litigation / Class Actions – Defendants; Personal Injury Litigation - Defendants Alana Staniszewski, Workers' Compensation Law - Employers Michael D. Winsko, Product Liability Litigation – Defendants; Transportation Law King of Prussia, PA Richard Lechette, Commercial Litigation; Insurance Law, Personal Injury Litigation – Defendants

Thought Leadership

Florida Second DCA Clarifies the Timing of Negligence Claims Against Insurance Brokers

One of the recurring issues in insurance broker malpractice litigation is determining when a negligence claim against a broker becomes ripe. The Florida Second District Court of Appeal recently addressed that question in Bullington Insurance Group, LLC v. Gordon, 427 So. 3d 632 (Fla. 2d DCA 2026), reaffirming that a negligence claim against an insurance broker does not accrue while a related coverage dispute with the insurer remains pending. In Bullington, the plaintiff was employed as a driver and was involved in an auto accident. His employer's insurance broker had requested that he be added to the employer's commercial policy, and the insurer confirmed the addition. However, when the policy renewed, the plaintiff was not listed as a driver and was not covered at the time of the accident. Default judgments were entered against the plaintiff and his employer in litigation arising from the accident. The plaintiff then filed suit against the insurer for breach of contract and policy reformation, and separately against the broker for negligence. The broker moved to dismiss the negligence count as premature, arguing the coverage dispute with the insurer had to be resolved first. The trial court denied the motion. The Second District granted certiorari and quashed the order. Applying its 2014 decision in Wells Fargo Insurance Services USA, Inc. v. Blackshear, 136 So. 3d 1235 (Fla. 2d DCA 2014), the court held that the negligence claim against the broker was entirely dependent on a finding that the accident was not covered under the employer's policy. If coverage were established, the claim against the broker would fail as a matter of course. Because the breach of contract and reformation claims against the insurer remained pending, the negligence count against the broker had not yet accrued. The court further addressed the appropriate remedy, rejecting the plaintiff's argument that abatement was warranted. The court distinguished cases holding that abatement is proper in the bad faith context, where an insured brings both an underlying coverage claim and a bad faith claim against the same insurer. Here, the broker and insurer were separate defendants, and Blackshear squarely held that dismissal without prejudice, not abatement, is the proper remedy for a premature broker negligence claim. This decision reinforces the practical significance of sequencing in insurance-related litigation. Where a plaintiff asserts simultaneous claims against both a carrier and a broker, defense counsel for the broker should promptly move to dismiss the broker negligence count as premature. Failure by the trial court to grant such relief constitutes a departure from the essential requirements of law.

Jason Banonis Holds PDI Attorney of the Year Award with the PDI President

News

Jason Banonis Named Attorney of the Year by the Pennsylvania Defense Institute

Congratulations To Our 2026 Ohio Super Lawyers & Rising Stars! Super Lawyers: Thomas F. Glassman Personal Injury, General Defense. Rising Stars: Micheal A. Roberts Personal Injury, Medical Malpractice Defense, Gabriella M. Wittbrod Personal Injury, Medical Malpractice Defense

News

Marshall Dennehey Announces 2026 Ohio Super Lawyers and Rising Stars

Thought Leadership

Insurance Broker Best Practices to Reduce AI-Related E&O Risk

Insurance agencies and brokerages, like most businesses, are increasingly using artificial intelligence and large language models (LLMs), such as ChatGPT and Gemini, in their daily operations. AI can provide significant advantages, including greater efficiency, enhanced productivity, and cost savings. For example, brokers may use AI to generate policy comparisons and proposals, accelerating the quoting process. However, these benefits come with risks. AI-generated information may be inaccurate, leading to improper advice, coverage misrepresentations, or binding coverage that violates underwriting guidelines. Overreliance on AI may also increase exposure to errors and omissions (E&O) claims and litigation. Insurance agencies can reduce AI-related risks by following these five best practices: 1. Require Licensed Producer Oversight AI can improve efficiency, but it does not replace the professional judgment or responsibility of a licensed producer. Treat AI-generated content as a preliminary draft that may contain errors. Before any quote, proposal, coverage summary, or policy comparison is provided to a client, a qualified individual should independently verify all material information, including coverage terms, limits, deductibles, exclusions and endorsements, against the applicable policy forms and source documents. 2. Establish a Formal AI Policy Agencies should adopt a written AI policy that defines: Approved AI tools; Information that may or may not be entered into AI platforms; AI outputs requiring licensed producer review; Tasks AI may assist with or perform autonomously, if any; and Permitted and prohibited uses. Approved uses may include document summarization and administrative support. Prohibited uses should include independently binding coverage, modifying limits, providing coverage advice, or communicating coverage determinations without human review. The policy should be distributed to all employees, supported by training, and reinforced through written acknowledgment of compliance. 3. Manage Third-Party AI and Data Security Risks Confidential client information, such as loss runs, financial records, proprietary information, or other sensitive data, should not be entered into unapproved public AI platforms. Agencies should also review contracts with AI vendors to ensure they adequately address confidentiality, cybersecurity controls, data retention, indemnification, insurance requirements, and limitations of liability. 4. Document AI Usage As with other client communications and insurance placement decisions, agencies should maintain records of AI-related activity. Documentation should reflect the client’s requests, information available to the producer, AI-generated output, any modifications or verification performed by agency personnel, communications with the client, and the coverage ultimately procured. Such records may provide valuable evidence in defending a future E&O claim. 5. Review Insurance Coverage Agencies should review their own E&O policies to determine whether any exclusions, limitations, or endorsements affect coverage for AI-related activities.  Likewise, agencies should be aware of any AI-related coverage restrictions contained in policies they recommend or place for clients. Conclusion AI is a valuable tool that can help insurance agents and brokers improve efficiency and service. However, it should supplement rather than replace the oversight, expertise, and professional judgment of a licensed producer. This article was originally published on PLUS Blog, the blog of the Professional Liability Underwriting Society, on August 20, 2026. All rights reserved. Further duplication without prior permission is prohibited.