Bee-lieve It or Not: Insurance agent negligent; insured awarded only premium amount in damages

The court found an insurance agent was negligent for failing to inform the insured that the requested coverage for weather-related losses of both bees and larvae was unavailable, but damages were limited to the amount of premium paid as the coverage sought was not available from another insurer.

Insurance law – Farm policies – Agents and brokers – Duties and liabilities of agent – Failure to obtain reasonable coverage.

Kushniruk v. O’reilly Insurance Ltd., [2025] S.J. No. 171, Saskatchewan Court of King’s Bench, June 18, 2025, R.C. Wempe J.

The insured was a farmer and teacher who operated an apiary in the RM of Cana, Saskatchewan. He raised bees which were to pollinate alfalfa and sweet clover fields and larvae/bees he expected to produce over the season.

In 2017, the insured first obtained a Farm Guard policy of insurance for the bees to cover loss due to fire, wind, theft, transportation accidents and ravaging animals. He obtained the coverage from the insurer, Co-Operators, through the defendant/insurance agent, O’Reilly Insurance Ltd. The insured maintained the policy until May 23, 2019. He did not renew his insurance for the 2020-2021 period but for the 2021-2022 period he purchased a new policy, understanding he was obtaining the same insurance through the same agent.

In 2017, the insured made a claim relating to a windstorm which caused a lack of flowers and impacted his apiary. This claim was covered. Following another windstorm in 2021 that caused significant losses, the insured made another claim, but this claim was denied. The insured was told that for his claim in 2017, the loss adjustment clause had been applied incorrectly and now, in correct application, his claim was denied. The insured was advised the loss was not covered because the number of adult bees and/or cocoons recovered at the end of the season was equal to or greater than the number of adult bees and/or cocoons released at the beginning of the season.

The insured alleged breach of contract and negligence against the insurance agent for failure to obtain the appropriate coverage for him which he believed included protection against weather-related losses of both bees and larvae.

The court found that there was no breach of contract by the insurance agent because the insured and the agent were not in a contractual relationship. The contract existed between the insured and the insurer, not the agent arranging the policy. The agent acted for a single insurer, which is different from when an insurance broker acts on behalf of a customer in choosing among various insurers.

The court found, however, that the agent was negligent in not exercising a reasonable degree of skill by failing to provide accurate information about available coverage. The insurance agent failed to inform the insured that coverage he wanted was not available. The insured was clear about what he wanted and was not told that this was not available.

Despite the finding of negligence, the insured could not demonstrate that the coverage he wanted was available elsewhere. The only provable damages were the amount of premium he had paid. The court awarded the insured damages in the amount of $963.00, the amount of premium paid.

This case was digested by Natasha Cooke and edited by Steven W. Abramson of Harper Grey LLP.  If you would like to discuss this case further, please feel free to contact them directly at [email protected] or [email protected].