Georgia Court of Appeals Expands Exposure for Insurance Brokers and E&O Carriers Following Coverage Denials
A recent Georgia Court of Appeals decision significantly expands the exposure brokers and E&O Carriers face after a proper coverage denial. On May 12, 2026, the Georgia Court of Appeals in Plummer v. Commercial Insurance Agency, Inc., directly addressed whether insureds may assign negligent procurement claims against insurance brokers to third parties.
In Plummer, the plaintiff’s husband was shot and killed at a store owned by Henry Properties, Inc. (HPI). Plummer sued HPI for premises liability in the State Court DeKalb County. HPI’s insurer, Colony Insurance Company, then filed a declaratory judgment action in the United States District Court for the Northern District of Georgia and obtained a ruling that the policy did not provide coverage for Plummer’s claims.
After the ruling, Plummer and HPI entered into a $1,000,000 consent judgment. Apart of the agreement, Plummer agreed not to execute or collect the judgment against HPI, and HPI assigned its claims against its insurance broker, Commercial Insurance Agency, Inc. (CIA), to Plummer.
Plummer subsequently sued CIA in the State Court of Gwinnett County for negligence and breach of fiduciary duty, alleging CIA failed to procure adequate liability coverage for HPI. CIA moved to dismiss Plummer’s complaint arguing that the claims were non-assignable personal torts under O.C.G.A. § 44-12-24. The trial court agreed with CIA and dismissed the complaint with prejudice. Plummer appealed the trial court’s decision.
On appeal, the court of appeals reversed the trial court’s decision. The court explained Georgia law permits assignment of claims involving property interests, but prohibits assignment of personal tort claims. The distinction turns on the nature of the alleged injury. The court held personal torts involve injuries to the person, reputation or feelings, while property torts are purely pecuniary losses.
Applying that framework, the court concluded HPI’s alleged injury was pecuniary. Plummer’s complaint alleged HPI suffered economic harm, because it lacked appropriate insurance coverage for the underlying shooting incident. The court found the negligent procurement and breach of fiduciary duty claims qualified as assignable property torts.
This decision expands exposure for brokers and E&O carriers following coverage denials. Now when an insurer properly denies coverage based on policy terms, insureds may attempt to shift that uncovered exposure through consent judgments and assignments of negligent procurement claims against the insurance professionals involved in procuring the policy. Although the defendant in Plummer was an insurance broker, the decision may create a potential roadmap for future claims against insurance agents and other procurement professionals arising out of uncovered losses.
The foregoing is not intended to be a comprehensive analysis of the full effect of these changes. Nothing in this notice should be construed as legal advice. This document is intended only to notify our clients and other interested parties about important recent developments. Every effort has been made to ascertain the accuracy of the information contained within this notice.
