Is my insurance agent my agent or the insurance company's agent?

The Court of Appeals issued an interesting opinion addressing this topic last week.  In Genesee Food Services, Inc. v. Meadowbrook, Inc., two judges of the Court of Appeals held that the Plaintiffs could sue their insurance agent for [allegedly] arranging inadequate insurance, despite the fact that the Plaintiffs had executed a release that held harmless Citizens Insurance and its "agents".   Genesee Foods had experienced a disastrous fire after its agent, Meadowbrook, placed them with Citizens Insurance Company.   Meadowbrook had earlier executed an agency agreement with Citizens, and its attorneys argued that by the plain language of the Release and Settlement Agreement with Citizens, Meadowbrook was immune from suit. The Court of Appeals majority pointed out that Genesee had no knowledge of Meadowbrook's pre-existing relationship with Citizens, and that Meadowbrook, as an independent insurance agent, owed a fiduciary duty to Genesee.  Since Genesee relied on Meadowbrook to place it with an appropriate company, the majority held that Meadowbrook's duty to Genesee took precedence over its agency relationship with Citizens.

The dissenting judge would have enforced what she considered the unambiguous language of the Release and Settlement Agreement, and considered that any uncertainty about its application to Meadowbrook was a result of Genesee's mistake or lack of diligence.  Her opinion, which fails to distinguish between independent insurance agents and company agents, would not recognize any duty by Meadowbrook to its clients.  Her approach is similar to the Supreme Court's decision in the Harts case, and the majority decision in the Court of Appeals may not be the last word on this topic.  In hte mean time, the case certainly suggests that insureds should not purchase coverage through a "captive" agency:  at least some judges recognize that in purchasing insurance, clients are expecting some level of expertise by their agent and should be able to rely on the agent's advice as a fiduciary.