A recent decision of the Federal Court has clarified the scope
of an insurance brokers' duty to make reasonable enquiries to
ascertain the risks posed by their client's business
operations, and to advise on the available options to address those
risks.
In PC Case Gear Pty Ltd v Instrat Insurance Brokers Pty Ltd
(in liq) [2020] FCA 137, Anderson J found that the Instrat
Insurance Brokers Pty Ltd (the Broker) acted
negligently by failing to discern that PC Case Gear Pty Ltd
(PCCG) had an exposure to a copyright infringement
claim from the nature of its business, and by failing to raise that
risk (and the options to address it) with PCCG.
The decision will have consequences for insurance brokers as the
insurance market hardens. As narrow wordings and wider exclusions
become more common place, this decision is a timely reminder for
brokers of the importance of conducting interactive risk
assessments to identify possible exposures, and providing tailored
advice as to
