Rejected: Economic loss doctrine defense to negligence claims against insurance broker seeking purely economic damages; insurance brokers fall within professional liability exception to the rule.

The plaintiff, a building contractor, sued his insurance broker for breach of contract and negligence based on the broker’s failure to purchase liability insurance to cover roofing operations. Lacking such coverage, the plaintiff was uninsured for a claim brought by the estate of an independent contractor who died after falling from the plaintiff’s scaffold. The defendant argued that the negligence claim was barred under Pennsylvania law by the economic loss doctrine, which bars a plaintiff from recovering a purely economic loss suffered as a result of negligence, absent any physical injury or property damage; i.e., when a plaintiff’s sole loss is the benefit of the bargain (insurance policy proceeds), then plaintiffs are limited to suing on a contract theory alone, and not in tort. Professional negligence claims are an exception to the economic loss doctrine, but the defendant argued that the exception did not apply to insurance brokers because they are not specifically listed as professionals under Pa. Rule of Civ. P. 1042.1 against whom a professional liability action can be brought with a required certificate of merit. The court ruled that the exception applied to insurance brokers anyway, holding that the list of professionals under Rule 1042.1 is non-exhaustive. The court noted that Pennsylvania courts have described typical claims against brokers for “failure to procure” coverage as “professional negligence claims.” This is an adverse ruling for insurance brokers and agents, and such defendants should not expect to have negligence/tort claims against them dismissed under the economic loss doctrine in Pennsylvania.

_{Case Law Alerts, 4^th Quarter, October 2015}

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