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Insurance law is regulated by the states, and cases on broker liability can be decided very differently, depending on which state’s law applies. (Photo: thinkstock)

New York and New Jersey courts have adopted radically different approaches to the liability of insurance brokers to their customers. In New York, a broker is a salesperson who, in the absence of a special relationship, has no obligation to the customer except to sell it the insurance product that the customer requests. The special relationship is the exception to the rule — and no reported New York case has ever found a special relationship. The closest that a court ever came was Voss v. Neth Ins. Co. [22 N.Y.3d 728 (N.Y. 2014)], where the New York Court of Appeals reversed the lower court’s grant of summary judgment to the insurance broker on the question of whether there was a special relationship.

New Jersey has taken the opposite path in Aden v. Fortsh, [169 N.J. 64, 78 (N.J. 2001)] holding that an insurance broker is a fiduciary with a heightened duty to its customer. Following Aden, numerous New Jersey decisions have held brokers to be liable in a wide variety of circumstances.

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