So you sued the TPA and not the insurance carrier – now what?

B&R Consol., LLC v Zurich Am. Ins. Co., 2014 NY Slip Op 06287 (2d Dept. 2014)

“The defendants’ contention that Zurich is not a proper party to this action under Insurance Law § 3420(b) because it did not issue the subject policy to Powell is without merit. Although the defendants made a prima facie showing that Zurich did not issue the subject policy by submitting a copy of the policy’s declaration page, which stated that the issuing company was American Guarantee, B & R established in opposition to the defendants’ motion and in support of its cross motion that an apparent agency relationship existed between Zurich and American Guarantee which extended potential vicarious liability to Zurich (see generally Hallock v State of New York, 64 NY2d 224, 231). In addition to the presence of Zurich’s logo on documents created and distributed by American Guarantee, B & R demonstrated that Zurich’s claims counsel was assigned to handle Powell’s case, that the assigned counsel was required to follow Zurich’s guidelines and to submit bills to Zurich, and that Powell was contacted by Zurich’s Customer Care Center regarding the claim and was directed to file his claim on Zurich’s website (see Fletcher v Atex, Inc., 68 F3d 1451, 1461-1462 ). This evidence of Zurich’s direct participation in the administration of Powell’s claim is sufficient to establish, prima facie, that an agency relationship existed between Zurich and American Guarantee such that Zurich may be held liable to B & R (see In re Parmalat Sec. Litig., 375 F Supp 2d 278, 295 ). In opposition to B & R’s cross motion, the defendants failed to raise a triable issue of fact.”

Admittedly, this is an issue that never really concerned me personally.  I used to like watching a certain plaintiff attorney who has cluttered the Appellate Term with senseless appeals lose cases where he sued the TPA.  But the joy turned to anger when an insurance carrier called me on one of my Article 75 UM Petitions, demanded I discontinue against him because I sought to join a TPA as a proposed additional respondent and then demanded “costs” because I would not withdraw that branch of my Petition.

Alas, I will now have the last laugh 🙂

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Legal Update (February 2026): Since this 2014 post was published, there may have been developments in case law regarding apparent agency relationships between insurance carriers and third-party administrators, as well as potential amendments to Insurance Law § 3420 governing standing requirements in no-fault actions. Practitioners should verify current judicial interpretations of vicarious liability standards and review any regulatory updates that may affect TPA liability determinations.