No duty of care found to have been owed; causation of loss not
established
After a chemical fire, a company and director found they held no
insurance policy which would respond to their claim to recover
outlays of over $10 million relating to the clean-up. They
commenced proceedings against insurance brokers, alleging
negligence in the handling of their insurance affairs. However, a
Queensland Supreme Court ruling entered judgment for the brokers,
holding that the plaintiffs were not owed any duty of care by those
brokers and also that the plaintiffs had failed to prove that any
breach of the tortious duty they had argued could have caused them
loss.
Key Points
- While an insurance broker is obliged to take reasonable care in
providing broking services to the entity with which it contracts,
only in extraordinary circumstances would the broker have a duty of
care to a related third party to investigate and provide advice on
their insurance requirements.
