An Examination of the Special Relationship Theory of Liability in New Jersey

RQ Floors Corp. v. Liberty Ins. Assocs., Inc., highlights the special relationship theory of liability. In this case, the plaintiff appealed an order granting a summary judgment dismissal on claims of negligence, breach of duty, and breach of a fiduciary relationship against insurance producers.

The plaintiff argued that the insurance broker created a special relationship because he inspected the premises and equipment throughout several years, and was aware of a business expansion. It was alleged that the broker acted as a risk manager because he made recommendations on the coverage type and amount, which caused the plaintiff to rely on his expertise. Therefore, the plaintiff asserted that the broker was at fault because he failed to obtain the appropriate coverage for the business and code upgrades.

RQ Floors Corp., upholds the standard that the special relationship theory of liability is not based on professional training or standards, but on the the agent’s assumed duties and the duties that are normally associated with agent-insured relationship. This can be assumed through conduct that causes the insured to rely to his detriment.

Typically, insurance brokerage claims require the need for expert testimony, however, in order to prove this theory of liability, the court indicated focus is on the parties’ conduct, rather than the professional standard of care. The court noted that expert testimony is not required to establish a professional standard of care in the context of a special relationship, under the circumstances. Rather, courts consider parties’ arrangements, custom, course of dealing, the length of their relationship, and relative expertise to determine if there are greater responsibilities taken on by the producer.

In this case, the court determined that the defendant’s actions were well within the scope of his duties, emphasizing that an insurance broker should understand the different types of policies, their terms, and the available coverage that is offered. The court ultimately affirmed the summary judgment stating that the plaintiffs failed to establish a special relationship.

_{Legal Update for Insurance Agents & Brokers- February 2026, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2026 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact MEDeSatnick@mdwcg.com.}