Question:
The Landlord has a meth claim. Insurer has accepted claim and paid a cash amount based upon a cleaning quote.
Insured / Landlord has told us they will be keeping the money and not cleaning the property. The Meth limits are over the legal limits which is known to Landlord and Property Manager.
Landlord has now re-let the property to a new unsuspecting tenant. Insurer has decided to come off risk on hearing this which we would like to do as well.
Whilst clearly the Insured and their Property Manager have a fiduciary care to the new tenant as the insurance brokers to the property, do we?
Crossley Gates replies:
Presumably, you are currently the appointed insurance broker for the landlord. That appointment is an agency agreement at law, whereby the landlord is the principal and you are his/her agent.
Subject to any express terms of the agency agreement to the contrary, you can terminate it when you wish. Having said that, if no mandatory minimum notice is specified, I would recommend giving a reasonable period of at least 7 days notice before terminating the agency agreement. This gives the landlord time to appoint a replacement insurance broker.
Whether an insurance broker owes a duty of care to his/her client's tenant is a more difficult question. The safest course is for you to terminate the agency. Once terminated, the question becomes redundant going forward.
