Ontario Superior Court dismisses insurance brokerage's claims against departing producer and new brokerage: key takeaways from Able Insurance Group Ltd. v. Santiesteban

Katelyn Ellins and Stephen Gleave of DLA Piper acted for the defendants — the departing producer and her new brokerage — in this proceeding.

On August 27, 2026, Justice Robert Centa of the Ontario Superior Court of Justice released his decision in Able Insurance Group Ltd. et al. v. Santiesteban et al., 2026 ONSC 4925, dismissing in its entirety the plaintiff insurance brokerage's action against a departing producer, her personal corporation, her son, and the competing brokerage she joined. The Court also allowed the departing producer's counterclaim for underpaid commissions. The decision provides important guidance for producers, brokerages, and their counsel on competition, restrictive covenants, confidential information, and damages in the insurance brokerage industry.

Summary of the decision

Marisol Santiesteban was a successful commercial and personal insurance producer who sold insurance products through Able Insurance Group and Able Insurance Brokers (collectively, Able) beginning in August 2013 under a "Producer/Employee Agreement". The parties agreed that Ms. Santiesteban was an independent contractor, not an employee, notwithstanding the title of the agreement.

In January 2023, Ms. Santiesteban resigned from Able and joined Sound Insurance Services Inc. (Sound), a competing brokerage. She subsequently sent a general announcement to her former clients acknowledging the move. Many of her clients followed her to Sound.

Able sued alleging breach of contract, breach of fiduciary duty, breach of confidence, breach of the duty of honest performance, predominant purpose conspiracy, and inducing breach of contract. Able sought damages of up to $1,359,595.

Justice Centa dismissed Able's action in its entirety and awarded Ms. Santiesteban $21,928.10 on her counterclaim for underpaid commissions.

Wrongful competition in the insurance brokerage context

The decision provides a thorough discussion of what does, and does not, constitute wrongful competition in the insurance brokerage industry. Justice Centa held that because Ms. Santiesteban was neither a fiduciary nor bound by any enforceable restrictive covenants, she was free to compete with Able after her resignation, provided she did so lawfully.

The Court found that a former non-fiduciary producer is free to solicit her former employer's clients absent a valid contractual prohibition on such solicitation. Even if Ms. Santiesteban's activities amounted to solicitation (which the Court found they did not), she was free to do so as long as she did not use the employer's confidential information.

Fiduciary duty

Justice Centa found that Ms. Santiesteban did not owe a fiduciary duty to Able. This finding confirms prior decisions that an ordinary insurance producer, even a highly successful one, is not, by virtue of that role alone, a fiduciary of the brokerage. The mere fact that she had access to client information did not convert her into a fiduciary. Nor did the fact that Able "trusted" her to discharge her obligations as a producer, or that she had close personal relationships with her clients. Justice Centa noted that Ontario courts have consistently held that insurance salespeople's close personal relationships with their clients do not make them fiduciaries.

Restrictive covenants struck down

The Court struck down all of the restrictive covenants in the producer agreement, finding them unreasonable and unenforceable in their entirety.

A five-year non-competition and no-dealing provision was found to be unreasonable because it restricted an overly broad range of activity, included no geographic limitation, and extended far beyond protecting any of Able's legitimate proprietary interests. The Court noted that the use of the word "deal" would have prevented Ms. Santiesteban from accepting any insurance business from any Able client, even for types of insurance Able did not offer, or for goods and services entirely outside the insurance industry.

The sections in the agreement labelled "Non-Solicitation" were found to function as non-competition provisions and were struck down. Again, they contained no geographic or temporal limitation, purporting to have "world-wide and everlasting effect," which alone was sufficient to render them unenforceable. The clause was also ambiguous due to poor drafting, including sentence fragments that made its intended meaning unclear.

Justice Centa's analysis of the restrictive covenants in the agreement did not change because Ms. Santiesteban was an independent contractor rather than an employee. The Court held that since Ms. Santiesteban was an independent contractor, Able could not have more rights with respect to her than it would in a traditional employment context. The same reasonableness framework applied to Ms. Santiesteban, as an independent contractor, as would have applied if she had been an employee.

Option to buy the book as a penalty clause

The producer agreement purported to allow Ms. Santiesteban to escape the five-year non-dealing restriction by purchasing her book of business at fair market value. Justice Centa rejected the argument that this purchase option saved the restrictive covenant.

The Court found that the treatment of the option to buy the book of business operated as a penalty clause and constituted an unreasonable restraint on trade because it was being used to prevent Ms. Santiesteban from otherwise lawfully competing. Whether Ms. Santiesteban had the right after her departure to compete with Able or solicit its clients did not turn, in any way, on whether she owned all or some part of a species of intangible property in the book of business. The Court held that it was "not reasonable to compel Ms. Santiesteban to purchase her book of business to escape an unreasonable restrictive covenant".

Damages clause as a penalty clause

The producer agreement also imposed a damages provision requiring Ms. Santiesteban to pay two times the annual commission earned on any client she dealt with, or a $50,000 fine, whichever was greater, should she breach the “Non-Solicitation” clause. Justice Centa found this clause to be an unenforceable penalty clause in furtherance of a restraint of trade.

Scope of "confidential information"

The Court's interpretation of the scope of "confidential information" under the producer agreement has significant implications for the insurance brokerage industry. Justice Centa held that the definition of "Information" in the producer agreement captured only information provided by Able to Ms. Santiesteban, such as proprietary business plans, financial data, customer credit lists, policy numbers, and expiration dates. Importantly, confidential information did not include client contact information that prospective clients provided directly to Ms. Santiesteban and that she kept on her personal cellphone.

The Court noted that Ontario courts have consistently held that client names and contact information are not necessarily confidential information of the insurance broker, particularly where the salesperson developed the client leads and the clients provided their contact information directly to the salesperson. Justice Centa found that the contact information Ms. Santiesteban held was the prospective clients' personal and confidential information, not Able's.

As a result, Ms. Santiesteban's use of that contact information to send a general announcement to former clients and to facilitate policy transfers was not a breach of contract or the tort of breach of confidence.

Conspiracy and everyday competition

Justice Centa's findings on predominant purpose conspiracy reinforces that no such claims arise where a new brokerage is simply engaging in ordinary, everyday competition in the free market. The Court found no evidence that the predominant purpose of the defendants' conduct was to cause injury to Able. All of the evidence demonstrated that their predominant purpose was to maximize their own profits. The Court emphasized that acting to advance a group's own interests, even if this damages a competitor, has always been regarded as legitimate in the context of lawful economic competition.

Damages methodology

The Court rejected Able's damages methodology. Able's expert assessed the fair market value of the book of business using a multiple of gross commissions, arriving at figures between $1,283,500 and $2,016,500. Justice Centa did not accept this approach. He held that Able was entitled only to its lost profits and that ordering damages based on the fair market value of the book would amount to damages akin to an order for specific performance.

The Court held that a proper damages analysis would have required consideration of Able's lost revenue, a deduction of the costs necessarily incurred, an appropriate multiplier, and a contingency to account for future competition and uncertainty. Able's expert did not perform any such lost profits analysis. Even if Able had succeeded on liability, it would have been entitled only to nominal damages.

Conclusion

Able Insurance Group Ltd. v. Santiesteban is a comprehensive decision that addresses a wide range of issues arising when a producer departs an insurance brokerage. The decision reinforces that in Ontario, absent enforceable contractual restrictions or a fiduciary relationship, a departing producer is free to compete, so long as they do not misuse their former broker’s confidential information.