Georgia insurance brokers and agents are sounding the alarm—and perhaps checking their own errors and omissions coverage—after a recent state appeals court ruling opened the door for third parties to sue when full coverage is not secured.
“This ruling fails to understand the insurance buying process and is disastrous for agents and the industry,” said Michael Iverson, a commercial agent and former president of the Independent Insurance Agents of Georgia.
Iverson was speaking of a May 13 decision from the Court of Appeals of Georgia, which, for the first time, allows insureds to assign claims to people who are not on the policy but who may have been injured at the insured property.
The opinion in Plummer vs. Commercial Insurance Agency, if it’s not overturned by the state Supreme Court, essentially means that a carrier could correctly deny coverage, but a broker or agent could still be held liable, said attorney Kayla McCallum, of Atlanta, with the Swift Currie law firm, which was not involved in the litigation.
“Agents need to continue to make sure they are communicating with potential clients about coverage, and documenting the requests,” McCallum said. “Make sure you have it in writing about what type of coverage is requested.”
Attorneys for the defendant insurance agency, with the Andersen Tate Carr law firm, have already moved to ask the state Supreme Court to review the ruling. The high court may not make a decision on that for weeks.
The unprecedented decision stems from a shooting at a neighborhood store in East Atlanta, DeKalb County, in 2019. Stephanie Plummer’s husband, Ja’Marcus Holloway, was killed, and Plummer filed a premises liability suit against the store owner, Henry Properties Inc., or HPI.
Commercial Insurance Agency Inc. had acted as the insurance broker for the store, obtaining a commercial liability policy through Colony Insurance, the appeals court explained.
Colony denied coverage. In 2021, the carrier secured a judgment from the federal court in north Georgia declaring that a policy exclusion barred coverage for injuries resulting from assault, battery or firearms. So, the store owner sued the insurance broker, known as CIA, charging that the agency should have known it was not recommending adequate coverage for the situation.
The widow, Plummer, settled with HPI. As part of that settlement, HPI assigned its claims against the insurance broker to Plummer. Plummer’s attorneys, from the national firm of Morgan & Morgan, argued that CIA was guilty of negligence and breach of fiduciary duty by failing to obtain a policy or endorsement that would have covered shooting injuries at the store.
A lower court in DeKalb County sided with the insurance broker, finding that the claim was a personal tort, and personal torts are not assignable under Georgia law. The widow appealed, and the appellate judges agreed with her, deciding for the first time in Georgia litigation that the assigned claim was, in fact, a property claim.
“Here, the complaint does not allege that CIA injured HPI personally,” the appeals court wrote in the opinion. “Instead, the complaint alleges that HPI suffered pecuniary loss due to CIA’s failure to secure an appropriate insurance policy for HPI. Thus, the claims for negligence and breach of fiduciary duty were assignable to Plummer.”
The decision allows Plummer’s assigned claim lawsuit against the insurance broker to continue in DeKalb County court.
Agents and brokers are now hoping the Georgia Supreme Court will overturn the Court of Appeals’ decision. If it doesn’t, insurance interests could find themselves in uncharted waters—with little or no lifeline, agents said.
“This will create a much more litigious environment for agents and create more pressure on agents’ E&O insurance,” said John Barbour, CEO of the Independent Insurance Agents of Georgia. “At the heart of the Plummer case is the simple fact that an agent sold a commercial GL policy with a firearm exclusion. This type of exclusion has become commonplace in the market and is not an anomaly.”
The IIAG is now considering filing an amicus brief with the Supreme Court, arguing against the assignability of claims.
The firearms exclusion at the heart of the case did not arise in a vacuum, and it is informed by other high-profile Georgia premises liability suits, one of which resulted in a $43 million verdict against drugstore giant CVS in 2021. In that case, Georgia CVS vs. James Carmichael, the state appeals court found the pharmacy corporation knew of the risks in a high-crime area but did not install extra lighting and security guards before a man was shot in the parking lot in 2012.
The Georgia Supreme Court upheld that decision in 2023.
The Carmichael rulings triggered panic among insurance carriers in Georgia, and led more insurers to introduce firearms exclusions for thousands of businesses in and around Atlanta, a city with multiple neighborhoods that have been ranked as high in property and violent crimes, according to news reports.
The HPI shooting and the store’s insurance policy came well before the Carmichael rulings. But other eight-figure verdicts came in 2019, and some insurers had already begun to exclude coverage for criminal activity-related injuries, agents have said. The availability of liability coverage was not covered in the appeals court’s Plummer opinion, but it’s likely that coverage without firearms exclusions was not available or affordable at the time, said Iverson, the Georgia insurance agent.
The Plummer opinion, on top of Carmichael and other cases, will likely make it even more difficult for many businesses to find coverage, or to find brokers willing to place it.
“It’s pretty scary for insuring businesses and properties now, especially in high-crime areas,” attorney McCallum said. She noted that the full circumstances of the HPI store policy were not explained in the court opinion, and any agreement between the broker and the store owner were not available.
Iverson said that the Plummer ruling, if allowed to stand, will mean that agents can be held liable for simply doing what a customer requests.
“To hold an agent responsible for what a policyholder chooses to buy or not buy defies consumer choice,” Iverson noted. “Ultimately, the ruling would suggest an agent should force people to buy specific items because the agent could be held liable for the choices of the consumer. This ruling creates a new threshold that can broadly be applied outside of insurance as well. It is a nightmare if not addressed.”
Georgia’s 2025 tort-reform law, tackling what supporters said were excessive lawsuits and oversized jury awards, did not directly address assigned claims or insurance broker liability.
The Plummer opinion comes six months after a Florida appeals court reached the opposite conclusion in a closely watched case involving Brown & Brown insurance brokers. In that case, Florida’s 5th District Court of Appeals shot down a large damage verdict, essentially finding that a broker should not be blamed for not securing coverage that the insured never asked for and which was not available at the time. Read more here.
Because Georgia has never had a ruling similar to the Plummer decision, the Georgia Supreme Court may look to court opinions from other states for guidance, including the Brown & Brown case in Florida, McCallum said.
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