ELEVENTH CIRCUIT HOLDS INSURANCE COMPANY NOT LIABLE FOR NEGLIGENT INSPECTION WHERE INSPECTION WAS FOR UNDERWRITING – NOT SAFETY
In February 2008, a large explosion at a Georgia sugar refinery silo killed one employee and injured another. In the years and months leading up to the explosion, an insurance underwriter performed inspections of the refinery to perform property risk assessments for underwriting purposes. The deceased worker’s family and the injured worker argued that the insurer’s negligence in failing to identify the catastrophic threat of an explosion during its inspection caused the workers’ injuries. In granting the insurance company’s summary judgment motion, the Eleventh Circuit found that the inspections were conducted specifically for underwriting (rather than safety) purposes. The court emphasized that the insurance company “did not undertake to render services [] which it should have recognized as necessary for the protection of a third person.” Accordingly, the court held that the insurance company did not owe any legal duty to the refinery workers, and the workers’ claim failed as a matter of law.
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