Ordinarily, agents can't become fiduciaries without their consent
The Ohio Court of Appeals, at the end of last year, handed down a decision important to every agent and broker, especially those doing business in Ohio. Insureds whose coverage does not apply to a particular loss will often sue their agent or broker for failure to obtain the coverages they needed. To make their case, the insureds will invariably try to hold the agent or broker to a higher duty of care than he or she ordinarily has under the law. Specifically, they will attempt to prove that a fiduciary relationship exists between the parties. If they succeed, the case becomes easier for them to win.
A fiduciary duty is the highest standard of care imposed at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom he or she owes the duty. The fiduciary must not put personal interests before the duty and must not profit from the relationship, unless the principal consents. The fiduciary relationship is characterized by good faith, loyalty and trust. Fiduciary relationships include those between a trustee and beneficiary, a director and company, a lawyer and client, a stockbroker and client, and a doctor and patient.
To establish a fiduciary duty owed by an insurance agent or broker, the party claiming breach must show evidence of some special trust or confidence placed in the broker or agent by the insured and recognized by the agent, preferably in writing. The prudent agent or broker will make clear that the relationship with the insured is a business relationship.
The agent who successfully defended the following suit protected himself by clearly communicating with the insureds.












[Nielsen Ent. Inc. v. Ins. Unlimited Agency Inc. (May 8, 1986), Franklin App. No. 85AP-781],
Ashworth v. Lincoln Natl. Life Ins. Co., Franklin App. No. 95APE09-1181,
Ashworth, Ashworth
must show evidence of some special trust or confidence placed in the agent by the insured and recognized by the agent." [Gillin v. Indiana Ins. Co. (Oct. 30, 1998), Montgomery App. No. CA 17108.]










Nichols v. Schwendeman, 2007-Ohio-6602 (Ohio App. Dist.10 12/11/2007, 2007.OH.0006664).
Barry Zalma, Esq., CFE, is a California attorney. His practice emphasizes the representation of insurers and others in the business of insurance. He founded Zalma Insurance Consultants in 2001 and serves as its senior consultant. He provides expert witness testimony and consults with plaintiffs and defendants concerning insurance coverage, insurance claims handling and bad faith. He has qualified as an expert in state and federal courts in California, Mississippi, Texas and New Mexico, as well as in the Grand Caymans. He can be reached at [email protected] . His consulting practice's Web site is www.zic.bz .