“Video: The BI Interview with Kayla McCallum at Swift Currie”
Swift Currie attorney Kayla McCallum was featured in a Business Insurance video interview, offering insight into a recent court of appeals ruling with significant implications for insurance broker E&O liability.
McCallum explained the background of Plummer v. Commercial Insurance Agency, a case originating from a fatal shooting at a store owned by Henry Properties, Inc. (HPI). When the general liability policy secured by Commercial Insurance Agency (CIA) failed to cover the loss, HPI entered a $1 million consent judgment with the victim's wife, assigning her the rights to sue CIA directly. CIA filed a motion to dismiss, arguing that the claims were not assignable.
“The Georgia Court of Appeals rules this claim can be assigned to a third party, which is the first of its type of case here in Georgia. This has not been something that a third party could bring against an insurance broker, until May 12,” McCallum said.
McCallum clarified that the ruling simply means such claims can now be brought. “Now they’re saying claims can be brought, but the plaintiff still has to show that the insurance brokers were negligent or failed to procure the correct type of policy. It just opens that pathway now for plaintiffs to do this.”
As for practical implications, McCallum advised brokers to prioritize thorough documentation throughout the policy application process, including what coverage was requested, what options were presented, what the insured declined and what exclusions were flagged. She also cautioned brokers against broad language such as "you're fully covered" or "you're fully protected," which can be used against them in litigation.
“Brokers, if you have a claim, a serious uncovered claim like the one we see here where it’s a fatal shooting, make sure to notify your E&O carrier early. Let them know what’s going on, if there’s an uncovered loss just because now giving that early notice really matters when there is possible litigation coming your way from that third party,” McCallum said.
The case is currently being appealed to the Supreme Court of Georgia.
To listen to the interview, you may click here.
