Assigning Claims for Negligent Procurement of Insurance: The Court of Appeals Clarifies the Personal vs. Property Tort Divide

A frequent strategy in commercial litigation involves an insured defendant assigning its failure-to-procure or bad-faith claims against its insurance broker or carrier to an injured plaintiff in exchange for a covenant not to execute on a judgment. However, under Georgia law, the assignability of such claims hinges heavily on a critical statutory distinction: is the claim a property tort (which is assignable) or a personal tort (which is not)?

In a fresh decision, Plummer v. Commercial Insurance Agency, Inc., 2026 Ga. App. LEXIS 234, A26A0771 (May 12, 2026), the Court of Appeals of Georgia explicitly addressed this issue for the first time, providing critical clarity for business litigants and insurance brokers across the state. Ultimately, the Court of Appeals found that negligence and breach of fiduciary duty claims against an insurance broker are injuries suffered by a business that are strictly financial and pecuniary loss, and therefore, property torts that are fully assignable.

The Background

The dispute stems from an August 2019 incident where Ja'Marcus Holloway was shot and killed at a commercial store owned and operated by Henry Properties, Inc. (“HPI”). His widow, Stephanie Plummer, filed a premises liability lawsuit against HPI in 2021.

HPI had utilized an insurance broker, Commercial Insurance Agency, Inc. (“CIA”), to procure a commercial general liability policy. Unbeknownst to HPI, the policy obtained through Colony Insurance Company contained absolute exclusions for bodily injury arising out of assault, battery, or the use of firearms. Colony secured a declaratory judgment in federal court confirming it owed no coverage or defense to HPI for the fatal shooting. Left exposed, HPI entered into a consent judgment with Plummer for $1,000,000, accompanied by an agreement that Plummer would not enforce or collect the judgment against HPI. In exchange, HPI assigned all of its tort claims against CIA to Plummer. Plummer then filed suit against CIA in Gwinnett County, alleging negligence and breach of fiduciary duty for failing to obtain appropriate, un-excluded insurance coverage.

CIA moved to dismiss the complaint, pointing to Georgia’s assignment statute, OCGA § 44-12-24, which states that while property torts are freely assignable, a right of action for “personal torts, for legal malpractice, or for injuries arising from fraud” may not be assigned. CIA argued that because the underlying incident involved a personal injury/wrongful death, the broker negligence claims were inherently personal torts and thus unassignable as a matter of law. The trial court agreed and dismissed the case with prejudice.

The Court of Appeals Reverses

The Court of Appeals reversed the dismissal, clarifying how courts must evaluate the nature of an injury for assignment purposes. The court emphasized that “personal torts” are those involving an injury to the person, reputation, or feelings (e.g., physical injury, false imprisonment, malicious arrest), whereas “property tort”  involve injury or damage to real or personal property, including purely pecuniary and economic losses.

The Court rejected CIA’s contention that allowing this claim to proceed would collapse the statutory bar on assigning personal torts. CIA had argued that nearly every tort results in economic damages, but the court noted that CIA was “confusing the injury with the remedy.” While the underlying tragic event was a personal injury, the injury suffered by the business (HPI) was strictly a financial and pecuniary loss, specifically, the lack of an asset (appropriate insurance coverage) to shield its property from a $1,000,000 liability. Consequently, claims for negligent procurement of insurance and breach of fiduciary duty sound in property tort and are fully assignable.

Key Takeaways for Georgia Businesses and Litigators

• Broker Exposure: Insurance brokers and agencies in Georgia can face direct lawsuits from third-party plaintiffs via assignments if they fail to secure appropriate coverage requested by a commercial client.

• Economic Loss Rules: For assignability under OCGA § 44-12-24, courts look at the nature of the injury to the assignor. Because a corporation or business entity cannot suffer physical bodily injury or emotional harm, its professional liability claims resulting in financial exposure are almost exclusively property torts.

• Punitive Damages Distinction: Litigators should note that Plummer conceded on appeal that her claim for punitive damages was not assignable, confirming that while the underlying economic claims move forward, specialized statutory penalties may still be barred from transfer.

This ruling reinforces the validity of consent judgments coupled with assignments as a viable risk-shifting mechanism for commercial defendants facing uncovered liabilities due to broker errors.

Have questions about the assignability of tort claims in Georgia? The Mullman Law Firm, LLC offers businesses of all sizes legal advice and guidance on all matters related to carriers. Call us today for assistance.