The Illinois Supreme Court recently overturned the Court of Appeals’ decision in American Family Mut. Ins. Co. v. Krop, 82 N.E. 3d 533, 2017 IL App (1st) 161071 (Ill. App. 2017). As discussed in my post on June 14, 2017, the Illinois Appellate Court had concluded that the insured’s claim against their agent for negligent procurement of insurance did not arise until the insured knew or reasonable should have known of the injury, i.e., at the moment when the insurer denied coverage.
In overturning the decision, the Illinois Supreme Court in American Family Mut. Ins. Co. v. Krop, 2018 IL 122556 (Ill. Oct. 18, 2018), concluded that when customers have an opportunity to read their insurance policy and can reasonably be expected to understand its terms, the cause of action for negligent failure to procure insurance accrues as soon as the customer receives the policy.
In reaching its decision, the Illinois Supreme Court reviewed and analyzed the Insurance Placement Liability Act, Section 2-2201. Noting that the statute prevents an insurance producer from being held to the fiduciary standard (except in the narrowest set of circumstances which...
