Ordinarily, agents can't become fiduciaries without theirconsent
The Ohio Court of Appeals, at the end of last year, handed downa decision important to every agent and broker, especially thosedoing business in Ohio. Insureds whose coverage does not apply to aparticular loss will often sue their agent or broker for failure toobtain the coverages they needed. To make their case, the insuredswill invariably try to hold the agent or broker to a higher duty ofcare than he or she ordinarily has under the law. Specifically,they will attempt to prove that a fiduciary relationship existsbetween the parties. If they succeed, the case becomes easier forthem to win.
A fiduciary duty is the highest standard of care imposed ateither equity or law. A fiduciary is expected to be extremely loyalto the person to whom he or she owes the duty. The fiduciary mustnot put personal interests before the duty and must not profit fromthe relationship, unless the principal consents. The fiduciaryrelationship is characterized by good faith, loyalty and trust.Fiduciary relationships include those between a trustee andbeneficiary, a director and company, a lawyer and client, astockbroker and client, and a doctor and patient.
To establish a fiduciary duty owed by an insurance agent orbroker, the party claiming breach must show evidence of somespecial trust or confidence placed in the broker or agent by theinsured and recognized by the agent, preferably in writing. Theprudent agent or broker will make clear that the relationship withthe insured is a business relationship.
The agent who successfully defended the following suitprotected himself by clearly communicating with theinsureds.












[Nielsen Ent. Inc. v. Ins. Unlimited AgencyInc. (May 8, 1986), Franklin App. No. 85AP-781],
Ashworth v.Lincoln Natl. Life Ins. Co., Franklin App. No. 95APE09-1181,
Ashworth,Ashworth
must show evidence of some special trust or confidenceplaced in the agent by the insured and recognized by theagent."[Gillin v. Indiana Ins. Co.(Oct. 30, 1998), Montgomery App. No. CA 17108.]










Nichols v. Schwendeman, 2007-Ohio-6602 (Ohio App. Dist.1012/11/2007, 2007.OH.0006664).
Barry Zalma, Esq., CFE, is a California attorney. His practiceemphasizes the representation of insurers and others in thebusiness of insurance. He founded Zalma Insurance Consultants in2001 and serves as its senior consultant. He provides expertwitness testimony and consults with plaintiffs and defendantsconcerning insurance coverage, insurance claims handling and badfaith. He has qualified as an expert in state and federal courts inCalifornia, Mississippi, Texas and New Mexico, as well as in theGrand Caymans. He can be reached at[email protected]. Hisconsulting practice's Web site iswww.zic.bz.