Question of Adjuster Relationship With Insurer Debated in Court

After a hailstorm damage claim was denied, both insurer and its adjuster were called as defendants in court as co-conspirators. The court had to decide.
By: | January 13, 2019

The owners of SO Apartments, LLC, learned a wind and hailstorm caused damages to one of their rental properties in the state of Texas.

They contacted Everest Indemnity Insurance Company to issue a claim. Everest sent an adjuster to assess the damages, but the property owners were not happy with the results. They believed the adjuster failed to address all of the damages done to their property, and the insurer consequently chose not to act.

To make matters worse, the owners alleged, Everest ignored their “pleas for help,” instead acting unprofessionally.

In the owners’ eyes, their insurer had done the bare minimum. They failed to accept, deny or pay the claim in a timely manner, and they had sent an adjuster who “conducted an outcome-oriented investigation and under-scoped [the buildings’] damages.”

In court, the owners pointed to the policy, which stated that Everest would provide coverage for losses stemming from hailstorm damage. They cited breach of contract. They also named the adjuster as a defendant, citing civil conspiracy.


Everest brought the action to appeals court, because it did not see why the adjuster was included in the claim. It argued its adjuster was improperly joined into the court case because the owners had not brought a solid claim against him.

“The acts of the employees or agents are acts of the principal,” said Everest, and “employees and agents cannot conspire with one another unless they act outside the scope of their employment or for their own personal benefit.”

The owners did not allege the adjuster and Everest conspired outside the scope of employment, the insurer argued. The adjuster should not be included.

The court, however, did not agree with Everest’s logic. The adjuster was not improperly joined, the court confirmed, because he was hired by Everest in the first place. The claim — and the actions that were taken afterwards — stemmed from the adjuster’s decisions. The case, the court said, would move to state court for further investigation.

Scorecard: An adjuster is equally liable for the suit brought against their employer. Everest and the adjuster will both be called as defendants.

Takeaway: Employees of one’s company, whether directly working for the company or hired by contract, represent the company at the time of employment, making them liable for any lawsuits that may arise from their actions. &

Autumn Demberger is the content strategist at Risk & Insurance®. She can be reached at [email protected]

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