Source: New Jersey Law Journal

On Thursday, Feb. 21, 2019, Senate No. 2475 was passed by a 32-0 roll call vote; on Monday, Feb. 25, 2019, only four days later, that same bill the was passed by the Assembly by a 75-0-1 vote. According to its synopsis, the bill “[p]rohibits application of fiduciary standard to insurance producers; specifies qualifications of persons providing affidavit of merit in lawsuits against insurance producers.”

The New Jersey State Bar Association (NJSBA) has opposed this legislation. The NJSBA points out that the bill prohibits a policyholder’s claim of breach of fiduciary duty except under very narrow circumstances, unnecessarily extends protections exclusively to insurance producers under the affidavit of merit statute unlike other professionals, and abrogates current case law, Aden v. Fortsh, 169 N.J. 62 (2001).

In Aden, the Court held that “the comparative negligence defense is unavailable to a professional insurance broker who asserts that the client failed to read the policy and failed to detect the broker’s own negligence.” In doing so, the court noted that “[i]t is the broker, not the insured, who is the expert and the client is entitled to rely on that professional’s expertise in faithfully performing the very job he or she was hired to do.”

Citing “New Jersey’s tradition of holding insurance professionals and other fiduciaries to higher standards,” the court’s motivating concern about subjecting the policyholder to a standard of comparative negligence was that the “the fiduciary relationship between the professional and the client may be undermined and professionals may be allowed to escape liability for their malpractice.”