California Indemnity Insurance Premium Finance Co. v. Fireman's Fund Insurance

Opinion

PETERSON, P. J.

This appeal raises a difficult legal issue from the arcane world of insurance premium financing. When an insurance agent arranges a fraudulent insurance premium financing transaction for an insured which purports to be—but is not—authorized or ratified by the insured, is the risk of liability for the insured’s subsequent loss of premium borne by the insurer issuing the original policy to the insured? Or is this risk borne by the lender relying on that agent’s purported but fraudulent authorization in financing the policy premium?

We conclude the trial court properly found…