$2,200,000 Jury Verdict Against Insurance Brokers Who Chose Not to Obtain Adequate Insurance Coverage for Company Purchasers

In December 2007, the plaintiffs, Brothers Future Holding LLC and Custom Gourmet Concepts LLC purchased a vacant meat packing plant located at 2684 N. 900 East Road in Ashkum, Ill.  The plaintiffs planned to use the property to start up a new custom contracting cooking company. The plaintiffs hired Assurance Agency, which was an insurance brokerage firm to procure insurance for any loss or damage to the property, and the brokers were to obtain a policy through Indiana Insurance Co.

Between Nov. 27, 2009 and Dec. 7, 2009, the real property was severely damaged by vandals and thieves who broke into the premises, cut and removed copper pipes, stripped copper from all of the electrical wiring and refrigeration systems and stole other fixtures and equipment for a total property loss of $2,272,168. However, the defendants — the insurance brokers — chose not to obtain ongoing vacancy coverage for the property, causing plaintiffs’ insurance claim for the loss to be denied by the insurer, Indiana Insurance Co.

The plaintiffs’ lawsuit asserted that the defendants knew that the building was vacant and that the plaintiffs had specifically requested vacancy insurance coverage.

The defendants argued that the plaintiffs never requested vacancy coverage, plaintiffs’ damages should be equal to the actual cash value of the lost or damaged property and fixtures and not the replacement cost and that the total damages were only $806,961.

The jury decided otherwise and found in favor of the plaintiffs on their claims for negligence in the procurement of insurance and for breach of contract to procure insurance for the full amount of the claimed amount.

The attorneys for the plaintiffs were Michael Collins and John Collins. 

The demand to settle the case before trial was $900,000.  The offer to settle the case by the defendants was $300,000.  The plaintiffs’ counsel asked the jury to return a verdict of $2,272,168, which is exactly what the jury did.  Sometimes settlements rather than jury verdicts works best for all of the parties involved.

Brothers Future Holding, LLC, Custom Gourmet Concepts, LLC v. Assurance Agency Ltd., et al., No. 11 L 3598 (Cook County, Illinois).

Kreisman Law Offices has been successfully handling business and commercial litigation matters for individuals, families and businesses for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Evanston, Highland Park, Lincolnshire, Geneva, St. Charles, South Elgin, Orland Park, Oak Lawn, Cicero, Crystal Lake, Woodstock, Gurnee, Chicago (Roscoe Village, Lincoln Park, West Town, Little Italy, Greek Town, Chinatown, Rogers Park), Libertyville and Fox Lake, Ill.

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