Danger In Permitting A Broker To Fill Out Insurance Application.

The premises of a business was damaged by fire. An endorsement in the business insurance policy required as a condition of insurance that the insured premises contain automatic sprinklers. The insurance application stated in the box entitled “FIRE PROTECTION (Sprinklers, Standpipes, CQ/Halon Systems),” that the applicant had “SMOKE DETECTORS/FIRE EXITING/SPRINKLERS.” The insurer declined coverage, and the insured brought an action for coverage. The trial court entered summary judgment in favor of the insurance company because it was undisputed that the premises did not have an automatic sprinkler system. The insured business claimed on appeal there is a triable issue of fact because the insurance broker who prepared its insurance application was an actual or ostensible agent of the insurance company. The appellate court concluded that the evidence showed as a matter of law the broker was not an agent of the insurance company and affirmed judgment in favor of the insurer. American Way Cellular, Inc. v. Travelers Property Casualty Company of America  (Cal. App. Second Dist., Div. 1; May 30, 2013) 216 Cal.App.4th 1040.