Losing Business To Competitor No Cause For Lawsuit

The business of insurance always has been competitive. Many insurers are loyal to the broker who brought them profitable business. When a broker or agent attempts to take a profitable piece of business from another broker, a responsible insurer will work to keep the business with the original broker. The actions of the insurer to keep the profitable business is, in most jurisdictions, privileged unless the plaintiff broker who loses the business can prove the actions were not privileged.

The Restatement (Second) of Torts is followed in Ohio and most jurisdictions regarding the privilege. It directs courts, when determining whether interference is privileged, to consider the following seven factors:

1. The nature of the actor’s conduct
2. The actor’s motive
3. The interests of the other with which the actor’s conduct interferes
4. The interests sought to be advanced by the actor
5. The social interests in protecting the freedom of action of the actor and the contractual interests of the other
6. The proximity or remoteness of the actor’s conduct to the interference, and
7. The relations between the parties.

In Havensure LLC v. Prudential Insurance Co. of America, No. 09-3367; 2010.C06.0000127 (6th Cir. 02/12/2010), the U.S. Court of Appeal for the Sixth Circuit held that the actions of an insurer were privileged. In that case, Havensure LLC (Havensure), an insurance broker, sued Prudential Insurance Co. of America (Prudential), an insurer, for tortious interference with Havensure’s business relationship with York International Corp. (York). Havensure claimed that Prudential offered York a better rate quote through Havensure’s competitor than through Havensure to prevent Havensure from winning York’s business. The district court granted summary judgment in favor of Prudential. The Sixth Circuit Court of Appeal agreed with the trial court that Prudential’s interference was privileged as a matter of Ohio law.