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Tech firm sues Gallagher over dropped communicable disease cover


NetDiligence has filed suit against Arthur J. Gallagher & Co., charging its communicable disease coverage was not renewed because of the actions of an inexperienced broker and Gallagher’s inefficient procedures.

Bryn Mawr, Pennsylvania-based Network Standards Corp., a cyber-risk assessment and data breach services company that conducts business as NetDiligence, holds annual cyber-risk summits in Philadelphia; Santa Monica, California; Toronto; London; and Bermuda, where it promotes its products, according to the complaint filed in U.S. District Court in New York in Network Standards Corp. d/b/a/ NetDiligence v. Arthur J. Gallagher & Co. and Jacklyn J. Hucke.

The complaint states the company had previously obtained communicable disease coverage as part of its event cancelation insurance, but because of wrong documentation sent by an inexperienced and unsupervised broker, the coverage was not renewed for this year, and NetDiligence did not learn of the oversight until March.

NetDiligence, which has canceled its London event, which was scheduled for December, was unsuccessful in resolving the issue with Gallagher, and its insurer, Lloyd’s of London, has denied coverage, according to the complaint.

The complaint states, “AJG created confusion for its broker and for its client NetDiligence by ignoring the need to document accurate pricing, by utilizing different confusing forms to bind coverage and by not following up with the client when clearly asked to do so” by its managing general agency.

“It defies logic that an inexperienced broker would unilaterally cancel communicable disease coverage without having any discussion with a longtime client such as NetDiligence on why a previously AJG-recommended coverage was being canceled, all while NetDiligence was growing revenue for each event and, as a result, increasing its overall premium.”

The complaint charges Gallagher with negligence, negligent misrepresentation, breach of fiduciary duty and negligent supervision.

A Gallagher spokeswoman had no comment.