I recently wrote about a controversial lawsuit involving anti-public adjuster endorsements being used by surplus lines insurers in The Insurance Industry’s New Playbook: Hire a Public Adjuster, and You May Lose Coverage. The case is pending in federal court in Massachusetts. 1 The insurer, Velocity Risk Underwriters, filed a motion to dismiss the lawsuit, and the public adjuster plaintiff has responded with a sharply worded reply defending both the merits of the case and the jurisdiction of the Massachusetts court to hear it. It is rapidly becoming one of the most significant legal battles in the country over whether insurance companies can use policy endorsements to discourage or effectively prohibit policyholders from hiring licensed public adjusters.
The case began after a Rhode Island country club suffered a substantial fire loss and allegedly wanted to retain Swerling Milton Winnick Public Insurance Adjusters (“SMW”) to assist with the claim. According to the complaint, the insurance policy contained an “Anti-Public Adjuster Endorsement” providing that the insured could not “hire, engage, retain, contract with, or otherwise utilize the services of a public adjuster” in connection with a covered loss. The lawsuit alleges that the endorsement and related insurer conduct interfered with the insured’s ability to obtain professional representation and unlawfully harmed the public adjusting profession.
Velocity’s motion to dismiss is well-crafted and focuses primarily on procedural defenses rather than fully defending the endorsement on the merits. The insurer argues that the federal court in Massachusetts lacks personal jurisdiction because the property, the insured, and the loss are all located in Rhode Island. Velocity also contends that Massachusetts consumer protection laws do not apply because the alleged conduct did not occur “primarily and substantially” in Massachusetts. Further, the insurer argues that the public adjuster plaintiff lacks standing because it is not a party to the insurance policy and therefore cannot seek to invalidate or reform the policy’s endorsement.
The motion repeatedly frames the dispute as nothing more than the insurer exercising its contractual rights. Velocity argues that the endorsement was part of a bargained-for surplus lines policy and that enforcing contractual provisions cannot amount to tortious interference or unfair business conduct. The insurer also attacks the complaint as speculative, arguing that the allegations concerning threats, coercion, and broader industry practices are unsupported and conclusory.
The reply brief filed by SMW pushes back hard. One of the more interesting aspects of the reply is its argument that Velocity is not some distant company with no Massachusetts connection. The public adjusters point out that Velocity is registered to do business in Massachusetts, appears on the Massachusetts Division of Insurance list of approved surplus lines carriers, and actively insures Massachusetts property. Concurrently with the reply, the plaintiff filed a Motion for Leave to Take Jurisdictional Discovery regarding the extent to which Velocity uses these anti-public-adjuster endorsements in Massachusetts policies.
The reply also reframes the alleged injury. SMW argues that this is not simply about losing a single fee from one claim. The brief states that public adjusting firms build goodwill, exposure, referrals, and reputation through handling large and high-profile losses. The plaintiff argues that being excluded from these claims creates business harms that are difficult to quantify and therefore constitute irreparable injury supporting injunctive relief.
This argument may resonate with a court because Massachusetts law has historically recognized that damage to goodwill and reputation can constitute irreparable harm. The reply also sharply criticizes Velocity’s portrayal of the requested injunction as some sweeping nationwide order that would cripple the insurance industry.
The public adjusting firm argues that Velocity’s filings focus heavily on procedural defenses while largely avoiding the central substantive issue about whether an insurer should be permitted to condition coverage on the insured giving up the right to hire a licensed public adjuster. That issue remains the elephant in the courtroom.
Public adjusters exist because many policyholders lack the expertise necessary to navigate complex property claims after catastrophic losses. Insurance companies employ trained adjusters, consultants, engineers, accountants, and attorneys. The public adjuster profession developed because policyholders often need their own expertise to level the playing field. The broader concern is whether endorsements like this are simply another attempt to isolate policyholders during the claims process.
The court has not yet ruled on the motion to dismiss or the request for injunctive relief. I will continue to keep readers updated as this important lawsuit develops.
Thought For The Day
“Justice delayed is justice denied.”
— William E. Gladstone
1 Swerling Milton Winnick Public Insurance Adjusters, Inc. v. Velocity Risk Underwriters, No. 1:26-cv-12095 (D. Mass. 2026).