LULA vs. AssuredPartners and Ricardo J. Vargas

LULA Technologies is suing its broker, AssuredPartners , after the collapse of its commercial auto offering and technology platform, for which it raised $60 million from investors including Founders Fund and Khosla Ventures.

On June 24, LULA filed a lawsuit in a Florida court against AssuredPartners and Ricardo J. Vargas. The lawsuit claims, “This is a case about how one of America’s largest insurance brokers caused a promising young company to lose everything.”

According to the lawsuit, LULA, a high-profile tech company founded in 2020, provided car rental agencies and car-sharing hosts with a platform to manage commercial auto insurance. By 2023, LULA was valued at over $300 million. LULA entrusted AssuredPartners and Vargas to secure a favorable insurance policy. However, the lawsuit claims they misrepresented the insurance program with Oxford Risk Management Group, leading LULA to pay over $30 million in premiums and an additional $20 million for customer losses. This caused LULA to shut down product lines and lose significant business opportunities. AssuredPartners and Vargas allegedly profited from the commissions despite breaching their duties.

LULA offered commercial auto coverage through a master policy with Assurant . As LULA sought lower-cost options in 2022, Vargas pushed a “proprietary” Oxford Program ( Oxford Risk Management Group ), which LULA found problematic. Despite clear directives from LULA’s leadership, Vargas continued promoting the program. Eventually, LULA discovered it was listed as the insurer, responsible for claims. This led to financial strain, with LULA paying over $10 million in premiums and facing immediate claims. By December 2022, LULA reported over $4.5 million in claims. The Oxford documents revealed complex agreements that LULA wasn’t prepared for, culminating in significant undisclosed liabilities.

The exact amount LULA is suing for is not specified.