In his November 2018 Insurance Law IICLE Flashpoints column, Michael “Mickey” Passman examines how the Illinois Supreme Court’s recent ruling in American Family Mutual Insurance Co. v. Krop applied the two-year statute of limitation claims against insurance producers.  

At issue was: (1) when the two-year statute of limitations begins to run; and (2) whether the “discovery rule” applies. The Court held that a negligence cause of action against an insurance producer accrues – and therefore the two-year statute of limitations begins – when the negligently procured policy is issued, regardless of when the insured learns that the negligently procured policy does not provide coverage. The Supreme Court declined to apply the “discovery rule” to start the statute of limitations period when the insured learns that the policy does not provide coverage. Instead, the Supreme Court held that, under Illinois law, insurance customers are responsible for reading the policy, understanding the terms and learning the specifics upon purchase. 

Because it is common for insurance disputes to arise years after a policy is issued, the Krop decision potentially insulates insurance producers from negligence liability in some circumstances. 

The full article from the Illinois Institute for Continuing Legal Education will be available here for a limited time.