Quebec's Superior Court recently ordered a broker and his
insurance firm to pay damages for negligence by the broker when
renewing insurance for a building.1
The context
The insured owns a building in which it runs a show bar on the
ground floor and rents out apartments on the upper floors. It had
insured its building through the same insurance broker firm (Firm)
since 2006.
On June 1, 2010, the insurance policy expired. The amount of
insurance on the building was $424,000. Two business days before
the expiration of the insurance policy, the Broker in charge of the
insured's file (Broker) met with the insured to discuss the
renewal. During the meeting, the Broker mentioned that the amount
of insurance might not be enough in the event of a loss. The Broker
and the insured agreed that the building should be appraised and
that the Broker would hire a chartered appraiser to do so. The cost
of the appraisal was to be shared by the Firm and the insured. In
the
