Pennsylvania state court denies stay in action filed against insurer and insurance broker.

An insurance broker sought to stay the plaintiff’s negligence action asserted against it pending a determination on the claims of breach of contract and bad faith alleged against the insurer. The court denied the motion to stay, concluding that a stay of the proceedings against the insurance broker would delay discovery and the global conclusion of the pending litigation and, moving forward, would not prejudice the insurance broker. 

Complaints asserting contractual claims against insurers and tort claims against insurance brokers are not unique. In fact, these parallel filings are quite common and flow naturally from the denial of a claim. Facing a claim denial, plaintiffs often pursue claims against both the insurer and the insurance broker, unsure whether the coverage issue arises from the procurement of the policy or the language of the policy itself. In practice, while a finding of coverage in many cases obviates a claim against the insurance broker, completing discovery as to both the insurer and the insurance broker simultaneously can streamline the litigation process and enable the parties to obtain records and depositions through discovery that can affect each parties’ defenses and strategy.
 

_{Legal Update for Insurance Agents & Brokers – August 2023 has been prepared for our readers by Marshall Dennehey. It is solely intended to provide information on recent legal developments and is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We welcome the opportunity to provide such legal assistance as you require on this and other subjects. If you receive the alerts in error, please send a note tgventura@mdwcg.com. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2023 Marshall Dennehey. All Rights Reserved.}