When Insurance Fails: Why Cobbling Coverage Across Multiple Carriers or Brokers Can Cost You Everything
If you own multiple businesses, properties, or LLCs, it’s easy to end up with a stack of policies and renewal dates that feels “covered enough.” The real risk isn’t just being underinsured – it’s having fractured coverage placed by multiple brokers and carriers that have never been coordinated.
The New York case Picone v. Great Northern Insurance Co. is a cautionary tale of how badly that can go.
The Picone story: a textbook coordination failure
In Picone, the insured was a successful entrepreneur who owned many small businesses operating under numerous names. One of those entities owned a vacant, undeveloped parcel of land. A guest was seriously injured on that land, and the owner did what most people would do: he notified every insurer he thought might be connected to that location. Every one of them declined coverage.
With liability hanging over him, the owner and two of his businesses sued five insurers and three brokers. In motion after motion, the insurers were largely successful in getting themselves dismissed from the case. The problem was not a complete lack of insurance; it was that his insurance program had been cobbled together piecemeal across multiple brokers, carriers, and entities that didn’t match how he actually owned property and operated his businesses.
Picone is simply the courtroom version of a story we see in quieter ways all the time.
Why courts are still untangling these disputes
The Picone decision was made years ago, but the underlying issues remain very current. Courts are still untangling coverage disputes where multiple insurers, policies, and policy years collide, particularly regarding “other insurance” clauses and whether related claims are treated as a single loss or multiple losses. Even when a business technically “has coverage,” these structural problems can leave owners with far less protection than they expected when a serious claim hits.
Recent reviews of major insurance decisions highlight several themes:
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Disputes over how “other insurance” provisions allocate responsibility when more than one policy could respond to the same loss.
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Fights in D&O and professional liability over whether a series of lawsuits or investigations count as one “related claim” under a single policy year or multiple distinct claims across years.
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Large verdicts and settlements, particularly in bodily injury and professional liability, which magnify the impact of any gap or misalignment in limits and wording.
In other words, Picone isn’t a relic of the past; it’s an early example of coordination problems that courts are still dealing with today, just in more complex fact patterns.
How fractured programs break in practice
We often describe this as the “fractured cobbler” problem: lots of pieces, no cohesive plan. Common failure points include:
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Inconsistent named insureds: The deed says “ABC Investments, LLC,” but the policy is written to “John Smith dba Smith Properties.” In a serious claim, an insurer can argue it never insured the actual owner.
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Different names and entities across policies: Personal lines, a single business policy, and the umbrella are each written to slightly different versions of the same person or company, or only one spouse is listed, even though assets are jointly owned.
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Multiple brokers, scattered markets: Home, auto, rentals, GL, and umbrella are placed with different brokers and carriers. No one owns the whole picture, so gaps and overlaps sit quietly until a loss tests every policy at once.
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An umbrella that doesn’t actually sit over everything: The umbrella schedule omits entities, locations, or vehicles, or it’s written by a different carrier with different definitions and exclusions than the primary. When a big loss hits, the primary and umbrella can point at each other.
On the Falcon Forward podcast, Mike Tanghe described one real‑world version of this risk when he talked about uninsured/underinsured motorist coverage: “If you have a company with significant assets… at the end of the day, that’s all at risk if you don’t have enough insurance.” The structure of your program determines whether a bad accident becomes a survivable event or an existential threat.
Related coordination challenges we see today
The Picone‑type coordination problem sits inside a broader set of challenges that modern cases keep surfacing:
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Competing “other insurance” clauses
When multiple liability or umbrella policies potentially apply to the same loss, carriers often point to “other insurance” language to argue they are excess or owe nothing. Courts frequently treat conflicting clauses as canceling each other out and requiring insurers to share the loss, but that fight happens on the policyholder’s time and dime. -
“Related claims” compressed into one policy year
In D&O and professional liability, courts are increasingly willing to treat a series of lawsuits or regulatory actions as a single “related claim” made in the earliest policy period, thereby exhausting one tower of limits and leaving later policies (and carriers) off the hook. -
Social inflation and nuclear verdicts
Large verdicts and settlements are trending higher across several lines, from bodily injury to newer tort exposures. When seven‑ or eight‑figure numbers are in play, small technical issues in wording, scheduling, or limit structure can have outsized financial consequences.
All three of these trends are made worse when different brokers place different pieces of the account, and no one is responsible for how the entire program fits together. A single lead advisor who understands your structure and coordinates terms and limits across carriers is one of the best defenses against these modern coverage fights.
A practical framework for business owners
From an owner’s perspective, the goal isn’t to become an insurance technician; it’s to avoid ending up in a Picone‑type situation. A practical framework is:
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Map your actual structure: List every legal entity (LLCs, corporations, partnerships, trusts) and tie each property, vehicle, and operation back to the exact entity that owns or operates it. Clarify where spouses, partners, or family members have ownership or personal exposure.
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Align named insureds and clean up “ghost” entities: The named insureds should be consistent across your program, and entities that own property, sign leases, or enter contracts need to be accounted for. If an entity can be sued, it should be visible in your coverage.
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Consolidate intelligently: Consolidation is less about moving everything to a single carrier and more about a cohesive design. For example, many coverage experts recommend placing underlying and umbrella policies with the same insurer when possible to reduce gaps and conflicting language in the event of a large loss.
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Treat the umbrella and UM/UIM as core tools: As highlighted in Falcon Forward, serious injuries often arise from auto accidents or premises incidents where the at‑fault party has low limits. A well‑designed umbrella and meaningful uninsured/underinsured motorist coverage are central to protecting both business and personal balance sheets.
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Re‑check coverage when your world changes: New entities, acquisitions, major leases, and changes in operations all alter your risk profile. Building a habit of asking, “What does this do to our insurance?” is a simple way to keep your program aligned with reality.
On the podcast, Peter Brecht summarized the mindset this way: “Our job as brokers is to make sure that we’re placing proper coverage and making sure that our clients are protected… Learn more every day about this industry. It’s kind of intriguing.”
That curiosity and discipline are what turn a pile of policies into an actual risk‑management tool.
Why does this matter beyond one case
Picone v. Great Northern gives a clean, unsettling picture of what happens when business and personal risks are insured under an uncoordinated patchwork of policies from multiple insurers and brokers. The broader case law since 2020 shows that courts are still being asked to sort out which policy, which carrier, and which year should respond when coverage hasn’t been thoughtfully engineered.
For business owners, the takeaway is less about memorizing doctrine and more about program design: avoid fractured coverage, insist that someone owns the entire picture, and make sure the way you actually live and do business is what your insurance contracts are built around.
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