08.03.2026

Learned Professional Exception – New Jersey

Lowe v. Audet
--- A.3d ---, No. A-12, 2026 WL 2035548 (N.J. July 15, 2026)

The New Jersey Supreme Court reversed the New Jersey Court of Appeals and held that insurance brokers, producers and agents are not exempt from the Consumer Fraud Act (CFA) under the “learned professional” exception as “semi-professionals” or otherwise.

Plaintiff James Lowe, M.D. (Lowe), a neurosurgeon, alleged that defendants Bernard Audet and Richard Laver, insurance brokers and producers employed by The Creative Financial Group, Ltd., sold him disability insurance policies between 2003 and 2016 and advised him that he would receive maximum benefits if he became disabled, without disclosing that unrelated business interests could affect a benefits claim. After Lowe was diagnosed in 2021 with a permanent vision condition that ended his neurosurgery practice, his insurers paid only partial benefits due to his other business interests, and he sued defendants for, among other claims, violating the CFA by failing to obtain sufficient disability insurance and by engaging in fraudulent, deceptive and unconscionable practices in marketing and selling the policies. The trial court dismissed the CFA count, and the intermediate appellate court affirmed.

On appeal, Lowe argued that the learned professional exception to the CFA was inapplicable to insurance brokers, producers and agents. He further argued that the learned professional exception was limited to professionals who have historically been recognized as “learned” based on the requirement of extensive learning or erudition. Defendants argued that applicable case law expanded the learned professional exception to include “semi-professionals,” and insurance brokers fall “within both the learned professional and semi-professional judicially created exceptions to the CFA.”

The New Jersey Supreme Court concluded that insurance brokers, producers and agents do not qualify as “learned” professionals like physicians, attorneys and theologians. The Supreme Court held that there was no basis for the exception in the actual text of the CFA. It emphasized that the CFA is remedial legislation to be construed broadly while any exemption is construed narrowly, and the Supreme Court held that extending the learned professional exception to insurance brokers would improperly narrow the statute and undermine its consumer-protection purpose. Additionally, the Supreme Court noted that the educational requirements for an insurance license are minimal, consisting of only a 20-hour state-approved course with no diploma requirement. The Supreme Court expressed doubts about the learned professional exception generally but declined to resolve that broader question, and it invited the legislature to clarify which, if any, professionals should be exempt from CFA liability.

By: Joshua LaBar

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Public Policy Exception – Pennsylvania

Samsung Fire and Marine Ins. Co. v. RI Settlement Trust
--- A.3d ---, 2026 WL 2115725 (Pa. July 21, 2026)

The Supreme Court of Pennsylvania, answering certified questions from the U.S. Court of Appeals for the Third Circuit, held that neither an insurer’s duty to defend nor its duty to indemnify is abrogated on public policy grounds when the insured is alleged to have enabled or profited from sex trafficking.

Four plaintiffs filed civil complaints alleging that, as minors, they were victims of human sex trafficking at the Roosevelt Inn in Philadelphia, Pennsylvania. They sued the hotel’s owners, operators and managers (collectively, the policyholders), alleging negligence in failing to stop sex trafficking at the Inn. The policyholders maintained primary-layer commercial general liability insurance through several insurers, including Samsung Fire and Marine Insurance Company, Harleysville Preferred Insurance Company and Nationwide Mutual Insurance Company. None of the primary policies contained sexual assault or abuse exclusions.

Relying on the plurality opinion in Minnesota Fire & Cas. Co. v. Greenfield, 855 A.2d 854 (Pa. 2004), the U.S. District Court for the Eastern District of Pennsylvania granted motions for judgment on the pleadings in favor of the insurers, concluding that public policy barred coverage under the policies where the damage arose out of an insured’s criminal acts. The trial court analogized sex trafficking to the drug dealing at issue in Greenfield and held that coverage was barred.

The policyholders appealed, and the appellate court certified two questions of Pennsylvania law to the Pennsylvania Supreme Court. The first asked whether Pennsylvania has an “overriding public policy” against sex trafficking such that an insurer’s duty to defend and indemnify is abrogated when an insured is alleged to have enabled or profited from such trafficking. The second asked what mens rea standard would apply if such a public policy existed. The Supreme Court answered the first certified question in the negative and, therefore, did not reach the second.

The Supreme Court observed that to reach the insurers’ desired result, it would have to both adopt the rationale of the Greenfield plurality and extend it beyond Schedule I controlled substances to sex trafficking, an invitation the Supreme Court declined. The Supreme Court noted that it is not within the judiciary’s “purview … to rank the magnitude of the public policy underlying the various crimes defined in the Crimes Code.” The Supreme Court stressed that insurance carriers are sophisticated entities capable of drafting policy exclusions for damages arising out of violations of criminal laws, and it refused to act as a “super-scrivener” to insert exclusions that insurers could have included themselves. The Supreme Court reaffirmed that the duty to defend is determined by comparing the four corners of the insurance contract to the four corners of the complaint.

As the intermediate appellate court analyzed only the public policy issue, the Supreme Court did the same and did not address whether the insurers had a duty to defend under their respective policy language.

By: Chelsea Kormos