Insurance Broker Mistakes & Financial Loss
An insurance broker owes a duty of care to their clients, and if they breach this duty they may be liable to their client in both in contract and in tort.
It is well established that a professional person has a duty to exercise all reasonable care and skill to the standard appropriate to the level of seniority of that person in their industry. The standard of care expected of an insurance broker is higher than the standard expected of a person who does not present themselves as possessing a special skill.
The starting point in establishing the scope of the duty of care between an insurance broker and their client is analysis of the written or oral contract of service along with the factual circumstances of the case. An Insurance Broker should only act act on their clients instructions, so identifying those instructions with some precision will also be important in establishing the broker’s obligations and whether there was any breach.
A breach of duty of care is not enough to sustain a viable claim against an insurance broker in tort. It must be accompanied by a financially quantifiable loss. If for example it is discovered that an insurance broker failed to take out the correct insurance package this may amount to a breach of duty of care, but unless this has caused the client to miss out on an insurance compensation payment there will likely be no purpose in bringing a claim in tort against the broker.
If you think your insurance broker has made an error which has caused you a financial loss you may be entitled to compensation. For more information, please contact Stacks Goudkamp on 1800 25 1800, or alternatively make an online enquiry.
Written by Alexander Morrison.
Alexander Morrison is an Associate and Solicitor in Victoria Roy’s Practice Group. Alex has a varied practice including motor vehicle claims and public liability claims that occur both within Australia and overseas.