A British Columbia court has found an insurance broker liable for failing to give adequate advice to a client.

The plaintiff in the case, Sportsman’s RV Resort Blind Bay B.C. Ltd., operates a resort which was insured under a policy issued by the defendants, Capri Insurance Services Ltd. Bob Collins, an insurance agent who was a shareholder and selling agent of Capri, was also a defendant in the suit.

After a fire damaged the resort, Sportsman’s learned that it was underinsured. It alleges that the defendants were negligent in failing to give proper advice and in failing to provide the plaintiff with adequate insurance.

The defence maintained that the underinsuring of the property resulted from the plaintiff’s own under-estimate of the replacement cost values as well as the failure of the plaintiff to provide an accurate appraisal of the property.

The judge, Mr. Justice Oppal, was left to decide whether the defendant agents were negligent in not providing the plaintiff with proper advice and with adequate insurance to cover the damage and loss.

Oppal wrote in his decision, “The law is not in dispute. An insurance agent owes a duty of care to a client. That duty goes beyond the mere taking and complying with instructions.”

“In failing to fully discuss the insurance needs with both clients, Collins failed to meet the standard of a reasonably competent insurance broker… [his conduct] was a breach of his duties. For these reasons the plaintiff’s claim is allowed.”