William Brown and his business partner, Claudine Grier, started a cupcake business called Big Man Bakes in 2009. Both had business experience and Grier had a master's degree in business administration from Columbia University.

In June 2009, Grier contacted insurance brokerage USI to obtain insurance for Big Man Bakes. She was referred to Hoskins, a broker in USI's small accounts department in charge of accounts generating less than $5,000 in revenue per year. Hoskins learned Grier sought basic insurance coverage for the business, which rented a small retail space and commercial kitchen and had no employees. Grier requested a quote for business property and liability coverage and informed Hoskins she wanted to keep the business's insurance costs low while still satisfying the landlord's and statutory insurance requirements.

Hoskins emailed Grier an insurance proposal based on their discussion. Grier responded with some corrections, including modifying the annual sales projection on which the insurance premium was based to get a lower premium. In her emails to Hoskins, Grier referred to the proffered insurance as "business insurance."