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On March 7, 2024, the purchasers of BL Insurance coverage Brokerage, LLC, a Massachusetts insurance coverage company positioned at 270 Huttleston Avenue, Fairhaven, acquired an e mail from the company’s supervisor, Brendan Lawler. The e-mail from Brendan Lawler learn:
“Good day,
I’m emailing to infirm (sic) you that I’ve completely closed BL Insurance coverage Brokerage, LLC, successfully (sic) 3/1/24. Your whole insurance policies can be transferred to a different agent or dealer by the insurance coverage firm who writes your coverage. When you have any questions concerning your coverage or protection, please contact the insurance coverage firm immediately or the wholesale agent listed in your coverage. They are going to be capable of help you. I want to thanks for your whole years of patronage, it was really appreciated. Please be suggested that any telephone calls or emails to our workplace is not going to be returned, since I’m not in enterprise. I’m sorry for any inconvenience.
Sincerely,
Brendan Lawler.”
The sudden closure of BL Insurance coverage Brokerage left many questions unanswered, because the company didn’t bear a sale or merger, and there was no obvious switch of renewal rights and expirations to a successor company.
Multi-state, multi-company company
In line with BL Insurance coverage Brokerage’s promoting, it was a full-service insurance coverage company licensed in a number of states, together with Arizona, Connecticut, Florida, Maine, Massachusetts, North Carolina, New Hampshire, New Jersey, Rhode Island, and Washington.
The Division of Insurance coverage web site, as of March 1, 2024, listed the company and its supervisor, Brendan Lawler, as having company appointments from at the very least fifteen totally different carriers, together with Nice American, Harleysville, The Hartford, Philadelphia Indemnity, Vacationers, and Twin Metropolis Fireplace.
Massive e-book of authorized malpractice insurance policies, together with bar advocate attorneys
The company reportedly had a major e-book of authorized malpractice insurance policies, with many of those insurance policies masking bar advocate attorneys who specialised in prison legislation as court-assigned counsel beneath the principles of the Committee for Public Counsel Providers (CPCS).
Attorneys accepting assignments to signify indigent defendants beneath numerous Bar Advocate Applications overseen by CPCS should preserve steady skilled legal responsibility insurance coverage with particular minimal protection quantities and deductibles. The CPCS guidelines stipulated that protection mustn’t lapse or be canceled, as this might void protection for claims made earlier than the beginning of any new coverage. Within the occasion of an insurance coverage lapse or cancellation, the bar advocate attorneys are required to inform their Bar Advocate Program(s) and/or CPCS in writing and promptly get hold of a brand new coverage with a “prior acts” date masking at the very least the previous six years or from the date they started accepting case assignments, whichever was newer.
Insureds begin receiving cancellations and direct payments for paid insurance policies
For a number of weeks earlier than BL Insurance coverage Brokerage’s March 7 e mail, a program supervisor specializing in authorized malpractice insurance coverage acquired greater than twenty-five calls from distressed attorneys, all sharing related experiences.
Every caller had bought their authorized malpractice insurance coverage via BL Insurance coverage Brokerage and had paid their coverage premiums to the company. Regardless of making these funds, a few of these attorneys have been now receiving cancellation notices from their insurers, indicating that their insurance policies have been being canceled on account of nonpayment of premiums. Others have been now receiving direct payments from their insurance coverage corporations searching for premiums they’d already paid to BL Insurance coverage Brokerage.
Compounding the problems confronted by these lawyer-insureds was the lack to contact BL Insurance coverage Brokerage or Brendan Lawler for help or clarification. Calls and emails to the company went unanswered, leaving the affected attorneys in a precarious place regarding their skilled legal responsibility protection. For the Bar Advocate attorneys, the cancellation of their malpractice protection may lead to termination of participation within the Bar Advocate program and nonpayment of their excellent program billings beneath the CPCS guidelines.
The attorneys, nonetheless, weren’t alone, as a social media put up dated February 6, 2024, from a buyer of BL Insurance coverage Brokerage reveals. The put up complains:
“3 months spent attempting to get a response on an allegedly cancelled coverage that we arrange with BL to be a month-to-month fee plan. All funds have been made to the third social gathering [premium finance company], nonetheless, the provider, Vacationers, signifies the coverage was cancelled in September on account of nonpayment. So there may be NO insurance coverage coverage and but we have now made all of the funds. BL has not returned emails or phone requires 3 months.” (Emphasis in unique).
Presumably, BL Insurance coverage Brokerage acquired the complete premium from the premium finance firm and by no means paid the coverage premium to Vacationers.
Insurer Sues BL Insurance coverage Brokerage for Premium Conversion
On January 3, 2024, Lawyer Protecting (AttPro), a subsidiary of MedPro Group/Berkshire Hathaway, filed a lawsuit towards BL Insurance coverage Brokerage, LLC, and its supervisor, Brendan Lawler, in Allen County, Indiana. The criticism alleges that the defendants collected $165,145.80 in premiums from AttPro’s insureds however did not remit fee to the insurer regardless of repeated calls for.
In line with the lawsuit, AttPro and BL Insurance coverage Brokerage entered into an Insurance coverage Company Settlement on July 15, 2015, for BL Insurance coverage Brokerage to market authorized malpractice insurance policies for a 12.5% fee. The settlement outlined two billing preparations: “company” billing, the place BL Insurance coverage Brokerage collected premiums from insureds and held them in belief earlier than remitting to AttPro, and “direct” billing, applied on August 1, 2023, which required insureds to pay AttPro immediately.
The criticism asserts that BL Insurance coverage Brokerage collected $136,479.10 in agency-billed premiums and $28,666.70 in direct-billed premiums after August 1, 2023, however did not remit these funds to AttPro. The lawsuit alleges claims for conversion, breach of contract, statutory fraud, and breach of fiduciary responsibility towards each BL Insurance coverage Brokerage and Brendan Lawler personally.
Neither BL Insurance coverage Brokerage nor Brendan Lawler have answered the criticism, and AttPro has filed a verified software for default judgment, which is scheduled to be heard on March 20, 2024. The insurer seeks a judgment of $165,145.80, trebled to $495,437.40 beneath Indiana’s Crime Victims Aid Act, together with affordable attorneys’ charges of $16,151, for a complete judgment of $511,588.40.
Fee to an Agent or Dealer Is Fee to the Insurer
Though it isn’t solely clear, it appears most insurers reinstate insurance policies as soon as they obtain proof of fee from the insureds to the company. Nevertheless, it’s potential that carriers who could have handled BL Insurance coverage Brokerage on a brokerage could take a special place. The frequent legislation is that an insurance coverage dealer is an agent of the insured and never of the insurance coverage firm.
That frequent legislation rule would possible not apply to any insured who can reveal that they’ve paid their premiums to BL Insurance coverage Brokerage.
Massachusetts Common Legal guidelines Chapter 175, § 169 states:
An insurance coverage agent or dealer performing for an individual aside from himself in negotiating, persevering with or renewing any coverage of insurance coverage or any annuity or pure endowment contract shall, for the aim of receiving any premium therefor, be held to be the agent of the corporate, no matter circumstances or stipulations could also be inserted within the coverage or contract.
In essence, this statute signifies that fee to an agent or dealer constitutes fee to the insurance coverage firm as a matter of legislation. Due to this fact, insureds who’ve paid their premiums to BL Insurance coverage Brokerage for the continuation or renewal of their insurance policies are thought-about to have made fee on to their insurers whether or not BL Insurance coverage Brokerage had an company settlement with the provider or not.
Company Checklists will preserve you posted on this case because it develops…
Owen Gallagher
Insurance coverage Protection Authorized Professional/Co-Founder & Writer of Company Checklists
Over the course of my authorized profession, I’ve argued a variety of circumstances within the Massachusetts Supreme Judicial Court docket in addition to helped brokers, insurance coverage corporations, and lawmakers alike with the complexities and idiosyncrasies of insurance coverage legislation within the Commonwealth.
Join with me immediately, by calling me at 617-598-3801.
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