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Insurance Agency Prevails on Motion to Dismiss
Spilman successfully prosecuted a Motion to Dismiss in the Circuit Court of Wood County, West Virginia, on behalf of its client, an established insurance agency. The insurance agency, and a large insurer, both were sued over the denial of insurance coverage for a prior employment discrimination claim against the Plaintiff. The denial of coverage was due to the Plaintiff's late reporting of the claim under an Employment Practices Liability Insurance Endorsement, which is a "claims made and reported" endorsement to a commercial general liability insurance policy (the claim must be made within the policy's reporting period). As a result of the insurance company's denial of coverage, the Plaintiff filed suit against the insurance company, and also asserted in the lawsuit that the insurance agency had negligently failed to procure the appropriate type of insurance coverage for it. The Plaintiff asserted that because of the long-standing relationship between it and its insurance agency, a "special relationship" existed that placed a duty upon the insurance agency to advise it on coverage. Spilman argued that despite Plaintiff's theory of recovery, West Virginia law does not recognize a "special relationship" test, and statutory law, as well as West Virginia case law, clearly states that an insurance agent has no duty to advise an insured as to the insured's insurance coverage needs. Spilman moved early to dismiss the suit with prejudice, prior to months and months of protracted litigation with the associated expenses. After the parties briefed the issue and argued before the Court, the Court ruled from the bench in Spilman's client's favor. As a result, the portion of the lawsuit against Spilman's client was fully dismissed, with prejudice. The Plaintiff's lawsuit against the insurance company remains pending.  

Insurance Insurance Coverage & Bad Faith Insurance Defense Don C. A. Parker