A recent ruling in a $60 million liposuction death case has brought renewed attention to a growing trend in the insurance and legal landscape: sued parties, facing massive judgments, are increasingly turning around to sue their insurers for bad faith. For insurance brokers like Westwood Insurance Group, this case not only underscores the complexities of insurer liability but also highlights the potential risks brokers face of being dragged into court proceedings alongside their clients and insurers.
The $60 Million Liposuction Death Case: A Closer Look
The case centers on Opulence Aesthetic Medicine, a Georgia-based cosmetic surgery provider, and its professional liability insurer, Prime Insurance Co., based in Utah. In 2013, two patients, April Jenkins and another woman from the Beaubrun estate, died following liposuction procedures performed by Dr. Nedra Dodds. The resulting lawsuits led to a staggering $60 million judgment against the clinic.
Unable to cover such an amount, the clinic and plaintiffs turned their focus to Prime Insurance, alleging that the insurer acted in bad faith by failing to adequately defend the clinic, thus exposing it to the massive verdict.
Prime Insurance had issued a professional liability policy to Opulence with a $50,000 per-claim limit and a $100,000 aggregate limit, at a premium of $3,992. The insurer argued that its duty to defend ended once the policy limits were exhausted by defense costs, a position ultimately upheld by a Utah federal court on April 22, 2025. Judge Robert J. Shelby ruled that Prime did not act in bad faith, citing the insurer’s timely communication about the exhaustion of policy limits and its proactive step of seeking a declaratory judgment to clarify its obligations.
The court also dismissed claims that Prime violated Georgia’s surplus-lines statute, noting that such matters fall under the state insurance commissioner’s purview.
A Growing Trend: Sued Parties Targeting Insurers
While this ruling favored the insurer, it highlights a broader trend with significant implications for insurance brokers. Sued parties are increasingly filing bad faith claims against insurers, hoping to recover amounts far beyond policy limits. This trend stems from the financial desperation of insureds facing “excess verdicts” they cannot pay, often in high-stakes cases like medical malpractice or wrongful death.
A 2021 Supreme Court of Georgia decision illustrates the risks insurers face: GEICO was held liable for a $2.9 million default judgment against its insured, despite not being notified of the lawsuit, because it failed to follow its own claims manual in requesting legal documents from the insured.
The Double-Edged Sword for Brokers
For insurance brokers, this trend is a double-edged sword. On one hand, it underscores the importance of selecting insurers with robust claims-handling practices and clear policy terms—qualities that can protect both the insured and the broker from downstream litigation. On the other hand, brokers themselves can be pulled into these disputes.
If a client believes their broker failed to secure adequate coverage or properly advise them on policy limits, the broker may face lawsuits alleging negligence or breach of fiduciary duty. In the Opulence case, for instance, if the clinic had argued that its broker misrepresented the policy’s scope or failed to recommend higher limits, the broker could have been named in the suit alongside Prime Insurance.
The potential for brokers to be dragged into court proceedings is not hypothetical. In a 2023 California case, Smith v. Coastal Insurance Brokers, a medical practice sued its broker after a $10 million malpractice verdict exceeded its policy limits. The practice alleged that the broker failed to advise on the need for excess coverage, leaving it exposed. The court ultimately ruled in favor of the broker, finding that the practice had not requested higher limits, but the case illustrates the vulnerability brokers face in an era of rising bad faith claims. Similarly, in a 2024 Florida case, a broker was sued for failing to disclose that a policy was from a surplus-lines insurer, a claim that echoed the arguments in the Opulence case but targeted the broker directly.
Transparency is Critical
For agents and brokers, the lessons from the Opulence case are clear. First, transparency is critical. Brokers must ensure clients fully understand their policy limits, terms, and the nature of the insurer—especially when dealing with surplus-lines carriers, which often have unique regulatory requirements. In the Opulence case, the court noted that Prime’s policy clearly outlined the exhaustion of limits, a clarity that brokers should emulate in their communications with clients. Second, brokers should proactively recommend appropriate coverage levels, particularly for high-risk professions like cosmetic surgery, where claims can escalate quickly. Documenting these recommendations can provide a defense if a client later claims they were underinsured.
Third, brokers must be vigilant in selecting insurers with strong reputations for claims handling. An insurer’s failure to settle within policy limits or provide an adequate defense can lead to bad faith claims, which may in turn prompt clients to sue their brokers for placing them with that insurer. In the Opulence case, Prime Insurance’s proactive steps—such as seeking a declaratory judgment—helped shield it from liability, but not all insurers are so diligent. Brokers can mitigate their risk by partnering with carriers known for fair and efficient claims practices.
Variations across State Lines
The broader implications for the insurance industry are still unfolding. Courts are increasingly scrutinizing bad faith claims to balance the protection of policyholders with the prevention of opportunistic litigation, as seen in the Utah court’s ruling. However, jurisdictional differences add complexity.
In California, a 2024 ruling allowed juries to consider an insurer’s regulatory violations in bad faith cases, even without a private right of action, while Georgia law in the Opulence case reserved such claims for the state insurance commissioner.
Brokers operating across multiple states must be aware of these variations to advise clients effectively and protect themselves from liability.
For brokers, this trend serves as both a warning and an opportunity. By prioritizing transparency, thorough documentation, and careful insurer selection, brokers can reduce their exposure to litigation while positioning themselves as trusted advisors in an increasingly litigious environment.
As the landscape of insurer liability continues to evolve, brokers who adapt to these challenges will be best equipped to navigate the risks—and help their clients do the same.
