'Special relationships' revisited

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Some agents and brokers have been viewed as order takers rather than insurance professionals. When does an order taker morph into a trusted advisor? As so often happens in the evolution of legal precedents, a phrase such as “special relationship” starts as a narrow exception to the general rule, and over time begins to swallow the rule.

This year, the Indiana Supreme Court took its turn at crafting a litmus test for a special relationship. In Indiana Restorative Dentistry v. Laven Insurance, the court dealt with a truly extended period of time. IRD, a dental practice, had opened in 1978, and worked with the same agent for the following 29 years. In 2009, a fire completely destroyed the dental office. The coverage for office contents had a limit of $200,000, but the loss of contents was valued at $700,000, thus a $500,000 underinsured loss.