Court Finds Reinsurance Brokerage Contract Ambiguous
Homeowners Choice, Inc. entered into a brokerage relationship with Aon Benfield, whereby Aon agreed to place reinsurance for Homeowners, as the broker of record, and that Aon would receive a commission from premium written. The parties later amended the agreement to include a revenue sharing provision, whereby Aon agreed to perform claim services for an annual fee. Homeowners then notified Aon that it was changing its broker of record, effective approximately one year from the notice. At the end of the notice period, Homeowners then demanded from Aon approximately $660,000 in revenue sharing fees it claimed were owed under the service agreement aspect of the contract. Aon disputed the claim, and Homeowner’s brought suit. The parties filed cross-motions for summary judgment, both making claims as to the correct interpretation of the contract. The court denied both motions, finding relevant provisions of the contract to be ambiguous, and that issues of fact remained pertaining to resolution of the ambiguities. Homeowners Choice, Inc. v. Aon Benfield, Inc., No. 10 C 7700 (N.D. Ill. Sept. 10, 2012).
This post written by John Pitblado.
