On November 19, 2014, a Texas appeals court affirmed the trial court and ruled that a policyholder could recover damages and attorney's fees from its insurance broker for negligently failing to procure a policy that contained the coverage the policyholder had requested. Insurance Alliance v. Lake Texoma Highport, LLC, No. 05-12-01313-CV (Tex. App. Nov. 19, 2014). The policyholder ("Highport"), the operator of a large marina, hired the broker ("Insurance Alliance") to procure "blanket" insurance coverage that would have applied one limit of indemnity to all losses, with no sublimits or coinsurance penalties. After Highport's marina and related businesses were damaged during a flood, Highport learned for the first time that the insurance policy its broker obtained included sublimits and coinsurance penalties, and was therefore insufficient to cover the loss. After a three-week trial, a jury found that Insurance Alliance had breached its agreement with Highport and had also made negligent misrepresentations and engaged in unfair or deceptive acts or practices. The jury awarded Highpoint the difference between the amount of coverage available under the policy Highport originally sought and the amount available under the policy it actually obtained. The jury also awarded Highport $2.7 million in attorney's fees incurred in bringing suit against Insurance Alliance. The appellate court affirmed these judgments on appeal.
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