You Should Have Told Us You Wanted That Kind of Coverage: What does your insurance broker owe you?

In Ontario civil litigation, actions concerning coverage disputes and uninsurable losses can dominate the legal landscape, specifically concerning the interpretation of the duties and obligations of an insurance broker. There are generally two defence positions that may arise in a coverage dispute:

1. the insurance company assuming the position that the policy was enacted explicitly per the broker’s instructions, and
2. conversely, the broker’s position that the policy was enacted pursuant to the customer’s request.

As such, it is critical for both insureds (individuals or companies with insurance policies) and brokers to understand the specific duties and obligations that are required in a customer-broker relationship. Insureds should expect their broker to do more than simply provide a policy, and to ensure their attention is drawn to any critical gaps in the coverage. Conversely, brokers should be diligent in understanding their duties and obligations to ensure their business practices reflect the stringent duties imposed by the Courts.

But, what are the specific duties and obligations that the parties should be mindful of?