The Connecticut Supreme Court recently addressed whether insurance brokers have a duty to notify clients of an insurer's nonrenewal decision. In Deer v. National General Ins. Co., homeowners, whose policy lapsed before their home was destroyed by a fire, sought to hold their longtime brokers liable for failing to alert them to the insurer's communication regarding nonrenewal. The Court rejected the claim, reaffirming that a broker's duty ordinarily ends once the requested policy is procured, and that liability arises only if the broker affirmatively undertakes to assist with renewals.
Case Background
The plaintiff purchased a one-year homeowners' policy from National General Insurance Company with the assistance of defendant's brokerage. Shortly after the issuance, the insurer inspected the property and identified defects in the siding that needed repair before renewal. The insurer communicated this requirement to the broker, but never received proof of repair. It then sent a nonrenewal notice directly to the plaintiffs, which they claim they never received. The policy expired without renewal, and shortly thereafter, a fire destroyed the home.
The plaintiffs sued the brokers, arguing they negligently failed to forward communications and had a duty to notify them of the impending lapse. The Trial Court granted summary judgment for the defendants, the Appellate Court affirmed, and the Supreme Court upheld the rulings.
The Court's Decision
The Supreme Court began its analysis with the general rule: once an insurance broker successfully procures coverage, its agency obligation to the insured ordinarily ends. The insurer, not the broker, is responsible for complying with statutory and contractual requirements for notice of nonrenewal. See Cheshire Brass Co. v. Wilson, 86 Conn. 551, 557-58, 86 A.26 (1913) (holding that agency terminates when its purpose is accomplished). In other words, an agent or broker is only liable for duties expressly undertaken. Ursini v. Goldman, 118 Conn. 554, 559, 173 A.789 (1934).
The Court recognized an exception to the general rule where a broker affirmatively undertakes responsibility for renewal, either by express agreement or consistent past conduct. This exception has been applied in Connecticut and elsewhere to hold brokers accountable when their actions created reliance on the part of insureds. Precision Mechanical Services, Inc. v. T.J. Pfund Associates, Inc.,109Conn.App. 560, 952 A.2d 1007 (2008). In deciding whether a broker has undertaken a duty to assist with renewal, a court must review the conduct and communications between the parties and ‘‘the extent to which they indicate that the [broker] has acknowledged an obligation to secure a policy.’’ Barnett v. Security Ins. Co. of Hartford, 84 N.C.App.376, 378, 352 S.E.2d 855 (1987).
On appeal, the plaintiffs argued that the defendants had procured insurance policies for them for more than two decades and that plaintiffs had built a relationship of trust with defendants. Therefore, plaintiffs asserted that these circumstances created a legal duty that required defendants to promptly notify the plaintiffs of communications from an insurance company, to include nonrenewal notifications. Defendants argued that they had no duty to notify the plaintiffs of the policy's nonrenewal.
Given the facts presented in the case at hand, the Court agreed with the Appellate Court that the defendant insurance broker had no continuing legal duty after procuring coverage, absent exceptional circumstances. Specifically, the agency relationship between the parties terminated after the defendants had procured the plaintiffs’ insurance policy in June 2019. The defendants owed no duty to inform the plaintiffs of information they received regarding the renewal.
In addition, the plaintiffs failed to produce any evidence that the defendants had ever undertaken such a responsibility to extend the agency relationship after procurement of the policy, in order to satisfy an exception to the general rule. There was no evidence that the parties communicated during the policy year with respect to the policy's renewal or that defendants would assist plaintiffs with the renewal. There was also no evidence that defendants collected necessary information to obtain renewal, in order to show defendants continued to act on plaintiffs' behalf or affirmatively sought to extend coverage.
Instead, plaintiffs unsuccessfully argued that defendants undertook a duty when the defendants tried to inform the plaintiffs of the insurer's intention not to renew the policy several days before and several days after the policy's expiration. The Court noted that these attempts at notification fell short of being an agreement to ensure continued insurance coverage. Plaintiffs also unsuccessfully argued that a duty should be imposed due to the longstanding relationship between the parties. While it was undisputed that defendants had procured insurance policies for the plaintiffs between 2001 and 2017, plaintiffs ended that relationship in 2017 when they decided to use another insurance brokerage. Plaintiffs restarted their relationship with defendants in June of 2019, when they asked defendants to procure a new homeowner's policy. This fact alone clearly unraveled their claim of an uninterrupted course of dealing. Further, the Court stated that, even if the parties had continued their relationship uninterrupted by two years, the length of that relationship alone is not sufficient to create an extended agency relationship because there must be evidence that the broker consistently participated in the renewal process or had taken some affirmative action with respect to renewing the policy it procured. In this case, plaintiffs failed to provide any evidence that defendants, through their conduct or communications, had undertaken an additional duty between 2001-2017 to assist plaintiffs with renewals. The Court provided examples in support of this position, to include Lisa's Style Shop, Inc. v. Hagen Ins. Agency, Inc. 181 Wis.2d 565, 573, 511 N.W.2d 849 (1994), where a six-year relationship was insufficient to establish a duty absent evidence of active renewal involvement, noting that the parties rarely spoke and the insured did not seek the broker's assistance. Likewise, in BioChemics, Inc. v. AXIS Reinsurance Co., 277 F. Supp.3d 251, 256 (D. Mass. 2017), no duty was found where a broker who obtained insurance annually and was never asked to provide, nor did it provide, insurance advice.
The Court affirmed the Appellate Court's judgment, ruling in the defendants' favor.
Public Policy Considerations
In its ruling, the Connecticut Supreme Court elaborated that negligence requires setting boundaries on liability, finding: "The problem for the law is to limit the legal consequences of wrongs to a controllable degree." Lawrence v. O & G Industries, Inc. 319 Conn. 641, 126 A.3d 569 (2015). The Court further detailed that statutory limits on insurer obligations may leave homeowners without coverage but any expansion of duties lies within the legislature's purview, not the judiciary. See Karas v. Liberty Ins. Corp., 335 Conn. 62, 228 A.3d 1012(2019).
Connecticut's statutory scheme provides a certain allocation of responsibility under Conn. Gen State §38a-(a)(1), which states insurers must send notice of nonrenewal, but insurers are not required to prove actual receipt. Extending that obligation to brokers, however, would be a policy decision for lawmakers.
Conclusion
The Deer decision reaffirms that, in Connecticut, brokers are not responsible for monitoring renewals or forwarding nonrenewal notices unless they explicitly undertake that role, even if there had been a longstanding relationship between the parties. This ruling provides strong precedent for brokers and their counsel. Notably, liability attaches only where the broker's conduct demonstrates an ongoing commitment to maintain coverage. For insureds, the decision highlights the importance of independently tracing renewal obligations unless the broker expressly assumes the responsibility.
Key Takeaways
- General Rule: A broker's duty ends once the requested policy is procured.
- Exception: Liability may arise only where the broker affirmatively agrees, or through consistent conduct, undertakes to assist with renewals.
- Longevity is not enough: A long-standing broker-client relationship does not itself create a duty.
- Legislative boundaries: Connecticut law places the burden of nonrenewal notice on insurers, not brokers; actual receipt is not required.
- Defense Strategy: Brokers should clearly define the scope of services and avoid conduct that could be construed as assuming renewal obligations.
- Insured's obligations: Policyholders must track their own renewal requirements unless they secure an explicit agreement that a broker will handle them.
Practical Steps to Consider Moving Forward
Brokers and agencies:
- State explicitly that services end upon placement unless continued by separate engagement.
- Avoid renewal language in communications unless you intend to assume that role. If you provide post-placement help, such as quotes, marketing, and reminders, then document that it is a courtesy and not an agreement to provide renewal assistance.
- Train account staff that causal assurances ("we'll take care of you at renewal") may be read as undertakings. Use approved scripts.
- Insurers should re-center workflows based on section statutory requirements regarding format, timing and mailing.
- Insurers should validate addresses and contact information to avoid disputes.
- Insurers should provide internal job aids or FAQs clarifying carriers, not brokers, control statutory notices.
Policy Holders and Risk Managers:
- Do not assume brokers monitor renewals unless expressly agreed.
- Implement internal calendar controls to track expirations.
- Require evidence of renewal binding or alternate placement before lapse.
- Route carrier's mailings to monitored inboxes with backup contacts.
Litigation and E&O Takeaway:
- Plaintiffs must now show concrete undertakings, such as written agreements, documented assurances, or patterns of renewal management to extend a broker's duty beyond procurement. Relationship length or vague expectations are not enough. Expect litigation to increasingly scrutinize emails, proposals, and renewal conversations to test whether a duty was voluntarily assumed.
