In September 2024 a Louisiana court in the US held that a claim for damages by an insured against the independent loss adjusting company employed by the insurer should be dismissed. An insurance adjuster generally does not owe a legal duty to an insurance claimant. Under Louisiana law, insurance adjusters owe a duty to claimants in very rare circumstances, including instances of fraud, or where the loss adjuster has provided the claimant with false information regarding the potential success of the claim and has reason to know that the claimant will rely on that information.
The insured argued that the loss adjuster “intentionally prepared a report in such a way as to deprive the insured of the insurance benefits to which it was entitled”. Even if proved (the allegations were not proved) this would not be sufficient to create liability. Alternatively, the insured alleged there was a conspiracy between the loss adjusters and the insurer’s contractor who assessed the repair costs allegedly caused by Hurricane Ida. The claimant filed a demand against its insurers and others, including the loss adjusters, arguing that it could not afford to repair the property because its insurance claims were wrongfully denied.
The contractor’s report determined that the damage to the property resulted from defects such as the age of the property’s roof and negligence maintenance of the property and its plumbing systems and not from the hurricane. The court held that in the absence of an allegation of fraud, a claim that the adjuster conspired with the insurer, or the insurer’s contractor, to avoid paying the claim would be contrary to statutory and case law limitations on suits against adjusters.
The claim was dismissed.
A similar result should follow under South African law. Absent fraud, loss adjusters for insurers have no obligations to the insured and should not imply that they do when dealing with insured parties.