Most coverage disputes start with a client saying, "I told you about that," and a broker responding, "You never asked me to cover it." The First Circuit's August 21 decision in Galakatos v. Marsh & McLennan Companies, Inc. draws a bright line between those two positions. If you're advising clients on broker liability, you need to understand where that line sits.
The case centers on Nicholas Galakatos, a Marsh client since 2006, who disclosed he owned a yacht in Greece but never explicitly requested coverage for it. When a collision triggered claims beyond what his marine policy covered, he sued Marsh for failing to close the gap in his excess liability coverage. The court dismissed every claim, holding that disclosure without an intelligible request creates no broker duty.
The myths that follow aren't just academic misunderstandings. They're arguments counsel will hear from clients, and they're assumptions brokers make when documenting their files. Here's what the First Circuit clarified.
Myth 1: A Long Client Relationship Expands Broker Duties
Reality: Duration alone doesn't create fiduciary obligations.
Galakatos had worked with Marsh for over a decade. He argued that this history imposed a heightened duty of investigation and advice. The First Circuit rejected the claim outright.
Under Massachusetts law, special circumstances can expand broker duties beyond standard placement obligations. These include complexity of coverage needs, frequency of contact, separate compensation for advisory services, and documented reliance on specific advice.
The complaint alleged none of these. The court noted that an October 2018 communication about an annual review was the first such contact in more than four years. The relationship was long but not substantively deep.
If you're evaluating whether a broker owes enhanced duties, don't count years. Count touchpoints, advisory engagements, and documented instances where the broker stepped beyond placement into consultation. A 15-year relationship with annual renewals and minimal contact carries less duty than a two-year relationship with monthly strategy sessions and paid risk assessments.
Myth 2: Asking Clients to "Disclose All Exposures" Creates an Obligation to Cover Them
Reality: A disclosure request isn't a coverage promise.
Marsh sent Galakatos a communication stating that to "thoroughly and appropriately advise" him and "eliminate potential gaps in coverage," it was important that all exposures be disclosed, even those Marsh wasn't currently covering.
Galakatos argued this language created a contractual obligation: once he disclosed the yacht, Marsh had to eliminate the gap.
The First Circuit found the statement created no enforceable promise. It was undated, specified no duration, and used conditional language ("in order to") rather than obligatory terms like "will" or "shall." Most critically, it requested information to enable advice, but it didn't promise any specific action.
This distinction matters when you're drafting engagement letters or reviewing broker communications. Asking clients to share information so you can advise them is standard practice. Promising to eliminate all gaps once they do is an uninsurable commitment. The court recognized that difference.
Myth 3: Disclosing an Asset Is the Same as Requesting Coverage for It
Reality: The complaint must allege an "intelligible request" for specific coverage.
This is the decision's core holding. The First Circuit applied the Massachusetts Supreme Judicial Court's 2022 standard from Masonic Temple Association of Quincy, Inc. v. Patel: brokers have a duty to obtain coverage their client asks for, but they can't be liable for failing to procure insurance when there was no intelligible request.
Galakatos alleged he "identified and disclosed" the yacht to Marsh. He did not allege he requested third-party liability coverage for it, asked Marsh to add it to his excess policies, or instructed Marsh to eliminate the coverage gap.
The court held that disclosure and request are not the same act. "Just because Marsh asked for certain information 'to thoroughly and appropriately advise [Galakatos] and eliminate potential gaps in coverage' does not mean that Galakatos requested Marsh do so once he informed Marsh of Galani's existence."
For claims counsel, this creates a clear pleading standard. If your client can't point to a communication where they asked the broker to obtain specific coverage or address a specific gap, the negligence claim likely fails at the motion to dismiss stage.
For brokers, it creates a documentation imperative. When a client discloses a new exposure, your file should reflect what you recommended and what the client instructed you to do. "Client disclosed yacht in Greece; no request for additional coverage" is a defensible note. Silence in the file is not.
Myth 4: Broker Marketing Language Creates Binding Obligations
Reality: Promotional statements about advisory services don't establish contractual duties without specific terms.
Galakatos pointed to Marsh's statement about advising clients and eliminating coverage gaps as evidence of a contractual promise. The court found the language too vague to constitute an enforceable obligation.
To support a breach of contract claim under Massachusetts law, you must identify with substantial certainty the promise allegedly breached. Marketing materials that describe a broker's general approach or philosophy don't meet that standard.
This doesn't mean engagement letters and service agreements are irrelevant. It means the terms must be specific: what services the broker will perform, under what timeline, and with what deliverables. "We provide comprehensive risk advisory services" is marketing. "We will conduct an annual coverage gap analysis and deliver a written report by December 31" is a contract term.
Myth 5: If the Broker Asked for the Information, They're Responsible for Acting on It
Reality: Soliciting information to enable advice doesn't obligate the broker to act without client instruction.
This myth conflates two distinct broker functions: gathering information and executing placement instructions. Marsh asked Galakatos to disclose all exposures so it could advise him. That request didn't transform every disclosed exposure into a placement mandate.
Brokers routinely ask clients for information they need to provide accurate quotes, identify coverage gaps, or recommend policy changes. That information-gathering is a precondition to advice, not a substitute for client instruction.
The First Circuit recognized that under typical circumstances, brokers are not expected to act proactively in procuring insurance. They respond to client requests. If you want a broker to take action, you must make an intelligible request for that action.
What to Do Instead
If you're advising brokers, your engagement letters should define what "advisory services" means in measurable terms. Annual reviews, gap analyses, and proactive recommendations should be listed as deliverables with timelines, not described in aspirational language.
If you're advising clients, document every coverage request in writing. After every conversation where you disclose a new asset or activity, send an email confirming whether you're asking the broker to obtain coverage, decline coverage, or simply provide a quote for your consideration.
If you're evaluating a potential claim against a broker, look for the intelligible request. If your client disclosed an exposure but never asked the broker to cover it, you're facing the Galakatos problem. Under Massachusetts law and now First Circuit precedent, that's not a viable negligence claim.
The line between disclosure and request is bright. Make sure your clients, your files, and your engagement letters reflect which side of it you're on.
