CLAIMS & THE LAW
SURPLUS LINE BROKER NOT AN INSURER Expert Analysis & Commentary by Barry Zalma, Esq., CFE Introduction
Hiscox sued seeking declaratory relief to validate the rescission of No Action Available The Lloyd’s Policy (the Policy) the Policy. provided fire insurance coverage Against Surplus Line for the high value home owned by Broker for Breach of Suzan E. Taylor, in Garland County, Join Barry Zalma’s Blog: Arkansas. Taylor purchased http://www.zalma.com/blog Contract or Bad Faith fire insurance coverage from fter her house burned Certain Underwriters at Lloyd’s of to the ground and her London (the Insurer). Under the Taylor filed an amended thirdinsurer rescinded the terms of the Policy, the dwelling party complaint against Burns & policy Suzan E. Taylor sued the was insured for $2.6 million Wilcox, Ltd. among others. Taylor insurer and the surplus line and the personal property was alleged four causes of action broker who obtained insurance insured for $1.3 million. Hiscox against Burns & Wilcox: breach for her from certain underwriters Dedicated Corporate Member of contract, bad faith, improper at Lloyd’s, London. The broker, Limited (“Hiscox”) is the majority rescission, and negligence. On Burns & Wilcox moved to dismiss underwriter of Lloyd’s Syndicate March 18, 2020, Burns & Wilcox Taylor’s action in Hiscox Dedicated #33, the only syndicate subscribed filed a 12(b)(6) motion to dismiss Corporate Member Limited v. to the Policy. and brief in support, contending Suzan E. Taylor v. The Society that Taylor has failed to plead facts Of Lloyd’s, The Corporation At After investigating the cause sufficient to establish her thirdLloyd’s, and Burns & Wilcox, Ltd., of the fire and taking Taylor’s party claims. NO. 6:18-CV-06100, United States examination under oath (EUO) the District Court Western District Of Policy was unilaterally rescinded Background Arkansas Hot Springs Division for alleged misrepresentations of material facts in the application. Taylor purchased a fire insurance (April 20, 2020)
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Barry Zalma, Esq., CFE, practiced law in California for more than 43 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. 6
The Underwriter’s Insider
Table of Contents
MAY 2020
