On October 18, 2018, the Illinois Supreme Court clarified when the statute of limitations begins to run on a claim for negligent procurement of insurance by an insurance agent or broker. In American Family Mutual Insurance Company v. Krop, 2018 IL 122556, the Illinois Supreme Court held that the two-year statute-of-limitations period on the customers’ cause of action against their insurer and the insurer’s captive agent for negligent failure to provide insurance began at the time the customers received the policy from the insurer/agent. The customers changed insurance companies and wanted from their new carrier coverage equivalent to that provided by their prior carrier; however, the new coverage was narrower, resulting in an unexpected denial of the customers’ claim, and the new carrier sued the customers for a declaration that coverage did not exist.
The Illinois Supreme Court’s rationale hinged on the fact that the customers obtained the policy through a captive agent of the carrier (as opposed to a broker). The customers argued successfully to the appellate court that the statute of...
