An insurance broker transacts insurance with, but not on behalf of, an insurer. In doing so, the broker generally promises only to obtain the insurance requested by the insured. However, when there is a special relationship between the insureds and their insurance broker, the duty owed to the insured can be expanded. New York and most states recognize that there are policy reasons for the narrow view of an insurance broker's duty to its client. Brokers are not insurance companies and do not earn premium income. They earn, ordinarily, relatively modest commissions for bringing insurers and insureds together. It is natural for a client that has suffered a loss not covered by its insurance to blame its insurance agent; and if lawsuits by clients against their agents are welcomed by the courts, the consequence may be to make the agent into a kind of back-up insurer.

In Voss v. Netherlands Ins. Co., 2014-01259 (N.Y. 02/25/2014), the highest court in New York was asked to resolve an insurance dispute that arose out of property damage and the consequent business interruption sustained by plaintiff-insureds as a result of water damage that occurred following three separate roof breaches. The water damage occurred in a commercial building owned by plaintiffs.

Plaintiffs began the relationship with CH Insurance Brokerage Services Co., Inc. (CHI) in 2004. At that time plaintiffs operated two modeling agencies in Liverpool. Voss met with a representative of CHI, Joe Convertino, Jr., to discuss insurance coverage for the premises and her two companies. At the initial meeting, they discussed property insurance, professional liability coverage and business interruption insurance. Convertino asked Voss to disclose sales figures and other pertinent information so he could calculate an appropriate level of business interruption coverage for her companies. According to Voss, Convertino also represented that CHI would reassess and revisit the coverage needs as her businesses grew.