If you are a property owner or conduct a business, proper insurance coverage is a critical part of asset and business protection.
Insurance should be your safety net, but what if the broker entrusted with securing your coverage fails you? When a broker’s negligence leads to financial loss, it’s vital to know your rights and the actions you can take to reclaim your losses. Don’t let a lapse in your broker’s duty undermine your financial security—empower yourself with the knowledge to hold them accountable and seek the compensation you deserve.
The Role of Insurance Brokers: Their Responsibilities and Your Expectations
Insurance brokers act as intermediaries between you and insurance companies. They are responsible for:
- Providing Expert Advice: Guiding you in selecting the right insurance products for you.
- Securing Appropriate Coverage: Ensuring that the policies you purchase meet your needs.
- Protecting Your Interests: Acting in your best interest throughout the insurance process.
However, when brokers fail in these duties, the financial consequences you suffer can be devastating.
Key Legal Principles: Holding Brokers Accountable
1. Duty of Care and Skill:
- It is well established that brokers owe a duty of care to ensure the policy they arrange covers your relevant risks (see Suncorp Metway Insurance Limited v Mason Place Pty Ltd & Anor [2011] QDC 209)
2. Disclosure Obligations:
- Brokers must inform you about your duty to disclose material facts to the insurer and provide comprehensive advice on the insurance contract and its implications.
- This was highlighted in Provincial Insurance Australia Pty Ltd v Consolidated Wood Products Pty Ltd (1991) 25 NSWLR 541.
3. Negligence in Securing Appropriate Coverage:
- Brokers may be liable for failing to secure adequate insurance coverage if this negligence leads to significant financial losses for the client.
- In D.J. & M.A. Hose Pty Ltd ATF The Hose Family Trust v Wide Bay Insurance Broking Pty Ltd ATF The Wide Bay Business Trust [2022] QSC 191, the court found the broker liable for not obtaining necessary asbestos insurance, which resulted in substantial losses for the client.
4. Failure to Inform:
- Brokers must adequately inform clients about policy exclusions and limitations.
- In Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603, the court found that a failure to disclose important policy details made the broker liable for the client’s resulting losses.
Conclusion:
The decisions from the cases mentioned demonstrate that the courts are increasingly willing to hold insurance brokers accountable for their professional failures. If you believe your broker has not met their obligations, resulting in financial loss, you may be able to seek compensation. If you are a property or business owner and feel let down by your insurance coverage, you may have a right to recover, but you should act quickly and seek advice. Contact our experienced property and commercial team at Rostron Carlyle Rojas Lawyers today to discuss your options and ensure your rights are protected.
The blog published by Rostron Carlyle Rojas is intended as general information only and is not legal advice on any subject matter. By viewing the blog posts, the reader understands there is no solicitor-client relationship between the reader and the blog published. The blog should not be used as a substitute for legal advice from a legal practitioner, and readers are urged to consult RCR on any legal queries concerning a specific situation.
