Insurance broker met the standard of care by advising its customer on the availability, purpose, and price of excess underinsured motorist protection coverage

The standard of care owed by an insurance broker to a customer is highly fact specific and circumstance-dependent. In this case, the broker met the standard of care by advising its customer on the availability, purpose, and price of excess underinsured motorist protection coverage. The broker was not required to go further and recommend or encourage the customer to purchase that coverage.

Insurance law – Automobile insurance – Underinsured – Damages; Practice – Appeals – Standard of review; Agents and brokers – Duties and liabilities of agent; Duties and liabilities of insurer.

Carriere-de-Davide v. Westland Insurance Group Ltd., [2025] B.C.J. No. 1517, British Columbia Court of Appeal, August 12, 2025, J.C. Grauer, M.L. Fleming and H. MacNaughton JJ.A.

The insured was seriously injured in a motor vehicle accident while riding as a passenger. His damages were assessed at $2,217,500.

The driver of the vehicle, who was at fault for the accident, had basic third-party liability insurance of $200,000. The insured had purchased only the base amount of underinsured motorist protection (“UMP”) of $1,000,000. The insured sued his broker, alleging that the broker failed to give him adequate advice about purchasing excess UMP coverage.

The trial judge found as fact that the insured was a long-standing customer of the brokerage and had declined excess UMP on previous renewals. The trial judge further found that, at the time of the most recent renewal, the broker had offered the insured excess UMP coverage, explained the nature of UMP coverage to him with reference to the kinds of uninsured and underinsured problems that could arise, and offered the insured $1,000,000 in excess UMP coverage for $25. The trial judge held that the broker, in sodoing, had discharged its duty to the insured.

On appeal, the insured argued that the trial judge erred by misstating and misapplying the test for the standard of care of an insurance broker. Specifically, the insured argued that the standard of care required the broker to encourage the insured to purchase excess UMP coverage by recommending that coverage.

The Court of Appeal dismissed the appeal.

The standard of care owed by a broker to its customer depends on the particular facts of each case. Generally, an insurance broker is under a stringent duty to provide its customer with information and advice about the coverage available to meet the customer’s needs. Where the customer adequately describes their circumstances, the onus is on the broker to review the customer’s needs and provide the full coverage requested by the customer. Where an uninsured loss occurs, a broker will be liable unless it had drawn to the customer’s attention the gap in coverage and advised how to protect against that gap.

In the present case, where the insured was a repeat customer whose circumstances had not changed and who had not raised specific concerns or needs, the broker was not required to go further and encourage the insured to purchase excess UMP by recommending the insured purchase that coverage. The broker had discharged its duty to the insured by explaining the nature of UMP coverage, the types of problems it protected against, and the price of the coverage.

This case was digested by Emilie LeDuc 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].