O&G Industries Inc. v. Litchfield Insurance Group Inc.
Allegations that an agent hired to obtain commercial general and excess liability insurance negligently obtained less coverage than required can be sufficient to allege negligence. In 2007, the plaintiff, O&G Industries, entered into a construction contract with Kleen Energy that required O&G to maintain $100 million in commercial general and umbrella liability insurance. O&G decided to obtain $50 million in coverage from a contractor controlled insurance program, or CCIP, and $50 million in coverage from umbrella liability insurance. O&G hired Aon Risk Services to obtain the CCIP insurance and Litchfield Insurance Group to obtain umbrella and excess insurance. Multiple deaths and injuries and millions of dollars of property damage occurred on Feb. 7, 2010, when there was an explosion at a Kleen Energy construction project. After AIG and other insurance carriers that issued excess liability insurance denied coverage for the explosion, O&G discovered that the insurance lacked the policy endorsement required to provide umbrella insurance in excess of the CCIP insurance. O&G sued Aon Risk Services and Litchfield Insurance, alleging breach of contract, negligence and malpractice. O&G requested a declaratory judgment and claimed it would have been fully covered, if Aon and Litchfield had obtained the amount of insurance O&G had requested. In Erikson Metals Corp. v. McManus, a 2008 decision, Superior Court Judge Robert Gilligan wrote, "Connecticut recognizes a cause of action against an insurance agent for failure to obtain insurance under a theory of either professional malpractice or breach of contract." To prevail, O&G must allege that O&G and the insurance agent agreed to a particular result. The court denied O&G's request for a declaratory judgment, because O&G has an adequate remedy at law. Construed in the light most favorable to O&G, allegations that O&G hired Aon to obtain a particular amount of insurance and Aon obtained less coverage than required are sufficient to allege breach of contract. Allegations that Aon was required to review O&G's insurance requirements, and to ensure coverage that Aon obtained was sufficient to meet O&G's requirements, were adequate to allege Aon was negligent and committed malpractice. The court denied the motion to strike.