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Agents' Errors And
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Employers Reinsurance
Corporation issued its General Liability and E&O policy to the E. Miller
Insurance Agency. Edward Miller, Sr., and his son, Edward Miller, Jr., were
also named insureds. Northbrook Property & Casualty Insurance Company, A.
J. Maggio Company, and Power Construction were defendants in an action for
declaratory judgment filed by Employers.
The evidence showed that the
Miller Agency had issued certificates of insurance to Maggio and Power Construction.
In December 1995, Northbrook sued the Miller agency (and its agents) for
consumer fraud, breach of fiduciary duties and breach of contract. The agency
was served with summons and complaint on January 16, 1996. Employers did not
receive notice until March 1997. However, Employers received notice of the suit
on March 22, 1996, from the attorney for Northbrook. (That litigation was still
pending at the time of the appeal in the declaratory judgment action.)
The higher court found that
Northbrook's notice was sufficient compliance with the policy requirement for
prompt notice. Employers then wrote to the Miller Agency for information and
documentation but received no response. Two more letters were sent. Employers
began its investigation after reserving its rights. Consequently, since the
insureds breached their duty to cooperate, Employers was entitled to assert
lack of cooperation, as required in the policy.
The judgment entered in the
trial court against Employers was reversed, and summary judgment was entered in
favor of Employers.
Employers Reinsurance
Corporation, Appellant, v. E. Miller Insurance Agency, Inc., et al.-No.
1-01-0579-Appellate Court of Illinois, First District, Fifth Division-June 28,
2002. Rehearing denied August 6, 2002-773 North Eastern Reporter 2d 707