A Texas insurance broker admitted he was negligent in failing to procure insurance for his client and still avoided liability because the damages incurred by the putative insured would not have been covered even if the policy was acquired as ordered.

The Texas Supreme Court held that a plaintiff, suing an insurance agent or broker for failing to acquire insurance, has the burden of proving that had the ordered policy been acquired, the insurer would have provided the defense and indemnity sought by the putative insured. Even though the following decision is based in part on Texas statutes, it is important that agents and brokers, and their counsels, understand that insurance is not available to protect against every conceivable risk. Some risks are simply uninsurable. Failure to obtain insurance for a risk that is uninsurable is not actionable because the failure causes no harm to the plaintiff.

In Metro Allied Insurance Agency Inc. v. Lin, No. 07-1032 (Tex. 12/11/2009), the Texas Supreme Court held that the causation standard for a claimed failure to procure insurance under a negligence theory and under the Texas Deceptive Trade Practices Act (DTPA)–both of which were alleged by the putative insured–requires proof of the availability of some insurance that would have covered the plaintiff's damages.