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Multi-million-dollar cost of false claim of expertise

In Williams v. Hilb, Rogal & Hobbs Insurance Services of California Inc., No. B203691 (Cal.App. Dist.2 09/09/2009)

By Barry Zalma | Updated on December 31, 2009

In Williams v. Hilb, Rogal & Hobbs Insurance Services of California Inc., No. B203691 (Cal.App. Dist.2 09/09/2009), the California Court of Appeal determined that an insurance agency was negligent in advising on, procuring and maintaining an insurance package for a new business venture that did not include workers’ compensation insurance. The lack of workers’ compensation insurance was discovered after an employee was injured in a catastrophic fire during the third year of business operations. After a lawsuit in which the employee obtained a multi-million-dollar judgment against the owners of the business, a suit was filed by the owners against the insurance agency.

The trial court, following a bench trial, found the insurance agency liable, and entered judgment in favor of the owners in the amount of the judgment that remained outstanding in the underlying case. The insurance agency unsuccessfully appealed claiming:

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