The Underlying Duty of a Reasonably Competent Insurance Broker

The underlying duty of a reasonably competent insurance broker is to provide a recommendation that is suitable to a customer’s demands and needs and to put that customer in a position that they can make an informed decision about the nature and extent of the insurance. It is my opinion that suitability does not mean that recommendations and advice ensure that all an insured’s conceivable risks are covered such that all conceivable losses are paid. In my opinion there is good evidence of suitability when an insured is not surprised (or should not be surprised) when an insurer partially or totally refuses to pay for a loss which has arisen (or a loss or damage is not covered), and/or the insurance arranged does not meet the client’s contractual or legal insurance obligations.