Background
Elite Rental Properties and Dalton Dodds retained Southern General Agency and The Lincoln Agency to procure insurance for rental properties, including a West Monroe property containing a single-family home and a rear structure with a small apartment. The agencies obtained a Nautilus policy effective January 31, 2022. The policy identified coverage for a single-family dwelling and did not list additional structures.
After a September 2022 fire severely damaged the rear structure, Nautilus denied coverage for that building. The plaintiffs sued in September 2023, alleging the agencies failed to procure adequate coverage. The district court sustained an exception of peremption under Louisiana Revised Statute 9:5606 and dismissed the claims with prejudice.
The Court’s Holding
The Second Circuit affirmed. Claims against insurance agents arising from insurance services are subject to a one-year peremptive period running from the alleged act or omission, or from when it was discovered or should have been discovered. An insured is deemed to know a policy’s contents upon receiving it and must read it.
The court held that the plaintiffs had constructive notice of the alleged coverage defect when they received the policy information. Because the policy covered a single-family dwelling and listed no additional structure, it put them on notice of a possible omission concerning the rear apartment. Their September 2023 suit was filed more than one year after the policy was issued and thus was perempted. The court also found no abuse of discretion in proceeding without further discovery, given the roughly year-and-a-half interval between suit and the dispositive filings.
Key Takeaways
- Louisiana’s one-year period for insurance-agent liability claims is peremptive and cannot be interrupted or suspended.
- An insured’s receipt of a policy can trigger constructive notice of an alleged coverage omission.
- A later claim denial does not necessarily delay the period when the policy itself reveals the alleged defect.
Why It Matters
The decision reinforces that insureds asserting negligent-procurement claims must promptly review policy terms and act within the statutory period. A belief that an agent would investigate property risks or obtain broader coverage did not overcome the policy’s express limitation to a single-family dwelling.