Why PIANJ supports comparative negligence protections for insurance producers 

When insurance agents or brokers are sued for professional negligence, their defense should be as fair and balanced as any other party in a civil lawsuit. But in New Jersey, that’s not always the case. Insurance producers face a unique and often unjust hurdle: they’re sometimes barred from asserting a key legal defense known as comparative negligence. 

PIANJ is championing a legislative effort to change that. This initiative would ensure that insurance producers are treated like virtually every other civil defendant in the state—able to defend themselves by demonstrating shared responsibility when clients allege professional mistakes. Here’s why this matters. 

Understanding comparative negligence 

Comparative negligence is a foundational concept in civil law. It acknowledges that in many disputes—especially in negligence cases—both parties might bear some responsibility. Rather than putting the entire burden on one side, this doctrine allows a judge or jury to apportion fault based on the specific facts of the case. 

For example, someone slips and falls on a wet floor at a store. The store may be partially at fault for not putting up a warning sign, but if the injured person was texting while walking and ignored obvious warning cones, the person’s own actions could have contributed to the accident. Under comparative negligence, the person’s ability to recover damages might be reduced in proportion to his or her own share of fault. 

This approach is widely seen as fair and just. It promotes shared responsibility and discourages opportunistic litigation. And, it’s the standard in most civil cases in New Jersey. 

But not for insurance producers 

Despite the widespread use of comparative negligence in civil law, insurance producers often are denied the ability to assert this defense—particularly when courts determine that a “special relationship” exists between the producer and the client. 

Here’s the problem: New Jersey courts have never clearly defined what constitutes a special relationship. This legal gray area creates inconsistency and uncertainty. In some cases, producers are allowed to use comparative negligence; in others, they aren’t. The result? A patchwork system in which insurance professionals are sometimes held to a different, higher legal standard than their clients. 

This isn’t just a theoretical concern. It’s a very real issue with serious consequences for the insurance industry and, by extension, New Jersey’s economy. 

The stakes for insurance producers—and consumers 

Insurance producers in New Jersey purchase errors-and-omissions insurance to protect themselves in the event of professional liability claims. But because they can’t consistently raise comparative negligence defenses, E&O insurers face increased risk—leading to higher premiums, reduced availability of coverage or both. 

As E&O coverage becomes more expensive or harder to obtain, independent agents are left with tough choices: reduce staff, cut back on services or sell to larger firms that can better absorb the costs. This threatens the viability of small- and mid-sized insurance agencies—the very businesses that offer personalized service and deep community ties across New Jersey. 

Moreover, the current system enables what some have called Monday morning quarterbacking. A client can decline optional or higher-limit coverages at the time of sale, suffer a loss, and then sue the agent for not recommending the coverage—regardless of whether the agent discussed it. In some cases, the clients end up effectively receiving the coverage they declined, thanks to the producer’s E&O policy. This doesn’t just punish producers—it distorts the very nature of the client-producer relationship. 

Insurance producers are meant to be trusted advisers, not de facto insurers themselves. 

What PIANJ is proposing 

PIANJ supports a proposal that wouldn’t shield producers from legitimate liability or limit consumers’ rights to sue. It would simply allow insurance producers to present a full and fair defense—just like any other party in a civil lawsuit. That includes the ability to show that the clients’ own actions or decisions contributed to their loss. 

In practical terms, this means a judge or jury would have the ability to weigh the facts and determine whether a comparative negligence defense is valid. It’s a common-sense change that would restore fairness to the courtroom and supports the long-term health of New Jersey’s insurance industry.