A summary judgment in favor of an engineer was reversed on appeal, with the court holding that an engineer that performed a post-loss insurance claim investigation was not protected by a state statute exempting liability for furnishing safety inspection or advisory services for insurance carriers. Here, a homeowner suffered property damage and made a claim to their insurance carrier who then hired an engineer to conduct a “post-loss claim investigation” of the damage so the carrier could decide how much to pay. The homeowner sued the engineer, alleging that its negligent performance caused them damages because they failed to discover the full extent of the damage caused by water infiltration. The court held that the statute was not intended to protect an engineer against liability from services rendered for a post-loss claim, but that the statute was only for services rendered before a property damage loss clam is made to the carrier. Cincinnati Insurance Company v. Ropicky, 397 Wis.2d 196 (2021).
8 WISCONSIN STAT. § 895.475 provides:
EXEMPTION FROM CIVIL LIABILITY FOR FURNISHING SAFETY INSPECTION OR ADVISORY SERVICES. The furnishing of, or failure to furnish, safety inspection or advisory services intended to reduce the likelihood of injury, death or loss shall not subject a state officer, employee or agent, or an insurer, the insurer’s agent or employee undertaking to perform such services as an incident to insurance, to liability for damages from injury, death or loss occurring as a result of any act or omission in the course of the safety inspection or advisory services. This section shall not apply if the active negligence of the state officer, employee or agent, or of the insurer, the insurer’s agent or employee created the condition that was the proximate cause of injury, death or loss. This section shall not apply to an insurer, the insurer’s agent or employee performing the safety inspection or advisory services when required to do so under the provisions of a written service contract.
The trial court granted the engineer summary judgment on the basis of the court’s finding that the engineer acted as the insurance company’s “agent.” In reversing the summary judgment, the appellate court held the statute does not provide immunity from liability for a post-loss claim investigation. It, therefore, didn’t’ address the issue of whether or not the engineer was acting as an agent of the carrier.
According to the court, no reported court decision in Wisconsin or any other state has applied the statute to a situation involving a post-claim investigation. The Court concludes that the “statute is unambiguously forward-looking”, meaning that the “advisory services” must be “intended to reduce the likelihood of loss.” The loss sought to be reduced by the “advisory services” is necessarily in the future. In this case, the engineer was investigating the cause of the homeowner’s reported property damage that already occurred. This is a post-loss evaluation of an insurance claim.
There being no evidence that the engineer provided any pre-loss advisory services, there was no basis to apply the statutory liability exemption.
About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk Report, Vol. 23, No. 8 (December 2021).
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