Duty of Care—Insurance Brokers—Advise or Consent?

Extract

Insurance brokers are liable to their clients in both contract and tort for any failure to carry out their mandate with reasonable care and skill. In most cases it makes no difference to the outcome whether a claim against a broker is based in contract or in tort. In the event of a dispute between broker and client on whether the broker has fulfilled his mandate, in the past the first question was to establish what the broker had agreed to do and then whether the broker had breached that duty. Until recently, it could be assumed that, if breach of duty by the agent was established, the kinds of loss recoverable by the client against the agent were those which were not too remote, i.e., those which were not only caused in fact (according to the “but for” test) but also caused “in law”: loss would be too remote unless it was of a kind reasonably foreseeable (tort) or reasonably contemplated (contract) by the agent, as a consequence of breach of duty.