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ARTICLE · 22 MAY 2012

Brokers beware - a $2.7 million lesson in disclosure

Cooper Grace Ward
Cooper Grace Ward
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Cooper Grace Ward

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Insurance brokers owe a duty of care to inquire about a property to be insured so as not to misrepresent the property.

AustraliaInsurance
Tony Park
Tony Park
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The recent $2.7 million Supreme Court decision in Kotku Bread Pty Ltd v Vero Insurance Ltd & Anor [2012] QSC 109 confirms that an insurance broker owes a duty of care to its client to not only take reasonable steps to inquire as to the property to be insured, but to not misrepresent the property to a third party.

On 19 August 2010, the plaintiff's bakery was destroyed by fire. He claimed against his insurance policy with Vero, which had been arranged by his insurance broker. The plaintiff's previous insurance was held with Suncorp-Metway Insurance (Suncorp), which had insured the plaintiff's business for several years. Suncorp acquired Vero in 2007 and certain information held by Suncorp was 'pre-populated' into Vero's computer system.

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