The U.S. Sixth Circuit Court of Appeals has held that an insurance agent had no obligation to advise a policyholder to procure pollution coverage absent a specific request for such advice.Hardy Oil Co., Inc. v. Nationwide Agribusiness Ins. Co., 2014 WL 4693816 (6th Cir. Sept. 22, 2014).

A petroleum distributor faced liabilities arising out of a diesel fuel leak. Its liability insurer denied coverage, and the insured sued not only the insurer, but also the insured’s agent on the basis that the agent was negligent in failing to advise regarding the need for pollution coverage. The agent moved for summary judgment on the grounds that coverage for such incidents was not available due to the age of the insured’s facilities and equipment. The insured offered evidence that multiple insurers would have offered such coverage. Summary judgment was granted in favor of the insurer.

The Sixth Circuit affirmed on different grounds. It held that, under Kentucky law, agents have no affirmative duty to advise a policyholder regarding the need for coverage unless there is (1) payment of additional consideration for such advice, (2) an extended course of dealing that would serve to put the agent on notice that its advice is being sought, or (3) a specific request for such advice. The Sixth Circuit held that the relationship involved was based not on the course of dealing and advice by the agent, but on the price of coverage. It also found that an “open-ended” request for insurance advice is insufficient under Kentucky law to give rise to any obligation on the part of the agent.