The Role of the Independent Insurance Adjuster

PAMIC Claims Summit 2015

Richard F. Andracki, Esq.Andracki Law Offices, P.C.428 Forbes Avenue, Suite 600Pittsburgh, PA 15219(412) 281-3330fax: (412) 281-2922Email: rfa@andrackilaw.com

Pennsylvania LawThis portion of presentation will cover:

Legal Implications of the Insurer-Adjuster Relationship(Hudock v. Donegal Mutual Ins. Co.)

Errors & Omissions of the Independent Adjuster

The Everyday Implications of the Insurer – Adjuster Relationship: Authority to Settle Claims Reporting Requirements Written or Recorded Statements

Legal Implications of the Insurer – Independent Adjuster RelationshipLiability for the acts and omissions of independent

insurance adjusters is imputed onto the insurance company.Hudock v. Donegal Mutual Ins. Co., 438 Pa. 272 (1970).

Independent Insurance Adjusters lack “privity of contract” with insureds.McCormick v. Yorktowne Mutual Ins. Co., 15 D. & C.3d

99 (1980).Insured cannot bring a cause of action directly

against independent insurance adjusterAllegrino v. Conway E&S, Inc., 2010 U.S. Dist. LEXIS

40732 (W.D. Pa. April 26, 2010).

Independent Insurance Adjuster’s Errors & Omissions PolicyErrors & Omissions policies protect

insurance adjusters for liability.However, there are exclusions for:

Intentional acts Claims made by employees or family members Claims arising out of advertisements Imputed or assumed liability as a result of a

contract or agreement

Legal Implications in Other JurisdictionsNorth Carolina & South Carolina

Both states recently held that a negligence cause of action against independent insurance adjusters is not permissible Koch v. Bell, Lewis & Assoc., 627 S.E.2d 636 (N.C. Ct. App.

2006); Charleston Dry Cleaners & Laundry, Inc. v. Zurich Am. Ins. Co., 586 S.E.2d 586 (S.C. 2003).

Minority ViewAlaska- Duty of ordinary care. Continental Ins. Co. v.

Bayless & Roberts, 608 P.2d 281 (Alas. 1980)New Hampshire- Duty to both insured and insurer.

Morvay v. Hanover Ins. Cos., 506 A.2d 333 (N.H. 1986)

California Here We Come!Negligent Misrepresentation

This cause of action has recently been used by California Courts to hold independent insurance adjusters liable to the insured. Bock v. Hansen, 170 Cal. Rptr.3d 293 (Ct. App. 2014) The tort of negligent misrepresentation has five (5) elements:

(1) a misrepresentation of a past or existing material fact; (2) made without reasonable ground for believing it to be

true; (3) made with the intent to induce another’s reliance on the

fact misrepresented; (4) justifiable reliance on the misrepresentation; AND (5) resulting damage.

Ragland v. U.S. Bank National Assn., 209 Cal. App. 4th 182 (Cal. App. 2012).

The Everyday Implications of the Insurer – Adjuster RelationshipApparent Authority to Settle Claims.

Zager v. Gubernick, 208 A.2d 45 (Pa. Super. 1965).

Reporting Requirements. 31 Pa. Code §§ 146.5 (a)-(d) – 146.6.

The Everyday Implications of the Insurer – Adjuster RelationshipThe Alphonse-Gaston Syndrome: Who’s on

First?

The Everyday Implications of the Insurer – Adjuster RelationshipWritten or Recorded Statements: When and

How?