Extent of an insurance broker’s duty to provide advice about excess coverage

In Carriere-de-Davide v Westland Insurance Group Ltd, 2025 BCCA 283 (“Carriere-de-Davide”), the British Columbia Court of Appeal assessed the content of a private insurance broker’s duty to provide advice about excess coverage. The Court confirmed that in the context of an automobile insurance policy, where an agent is dealing with a repeat customer who has declined excess coverage on previous renewals and shows no indication that it may now be of interest to them, it is not incumbent upon the agent to actively recommend that the customer purchase excess coverage. It is enough, in those circumstances, for the agent to offer and explain the option to purchase excess coverage.

Background facts

The Plaintiff, Mark Carriere-de-Davide, was seriously injured in a motor vehicle accident. The third-party liability coverage of the at-fault party was insufficient to cover the Plaintiff’s claim. As such, the most significant source for the Plaintiff’s recovery of damages was the underinsured motorist protection (“UMP”) coverage under his own Autoplan policy (the “Policy”). The Policy included basic UMP coverage of $1 million. This was insufficient to meet the Plaintiff’s needs.

The Plaintiff brought a negligence action against his insurance broker, Westland Insurance Group Ltd., claiming that they had breached their duty of care by failing to properly advise him of the option to purchase excess UMP coverage for $25. The excess UMP coverage would have provided the Plaintiff with an additional $1 million in coverage. The Plaintiff sought $1 million in damages to reflect the amount of additional compensation that he said he would have received from the Insurance Corporation of British Columbia (“ICBC”) had he purchased the excess coverage.

Trial decision

At trial, Brongers J. ruled in favour of the insurance broker. He dismissed the Plaintiff’s claim on the basis that the Plaintiff had failed to establish:

• that the insurance broker breached their duty of care; and
• that the insurance broker had caused the Plaintiff’s losses in fact or in law.

With respect to the extent to which the Westland agent advised the Plaintiff about excess UMP coverage, the trial judge preferred the agent’s evidence over the Plaintiff’s evidence. The trial judge found that the agent had followed a standard practice of explaining the nature of UMP coverage to the Plaintiff with reference to his driver’s license and the kinds of uninsured/underinsured problems that could arise, and by further offering him the excess coverage for $25. The trial judge found that the agent had not made any particular recommendation on whether the Plaintiff should purchase the excess coverage.

Issues on appeal

The Plaintiff appealed, arguing that the trial judge had erred by:

• misapplying the standard of care test for an insurance broker; and
• failing to consider relevant facts in the causation analysis.

Decision rendered by the Court of Appeal

The British Columbia Court of Appeal unanimously dismissed the Plaintiff’s appeal. The Court agreed with the trial judge’s application of the legal test governing the standard of care for an insurance broker and thus found it unnecessary to consider the issue of causation.

The parties agreed on the legal test governing the standard of care but disagreed on how this test applied to the facts. The Court concluded that this was a “classic question of mixed law and fact” and that the applicable standard of review was therefore deferential (at para 18).

The applicable test was set out by the Supreme Court of Canada in Fletcher v Manitoba Public Insurance Co, [1990] 3 SCR 191 at 217, 1990 CanLII 59. There, the Supreme Court of Canada stated that private insurance agents and brokers have a “stringent” duty to provide both information and advice to their customers. The Plaintiff argued that pursuant to this duty, the insurance agent he met with when renewing his Autoplan policy was required to not only explain the costs and benefits of excess UMP coverage but also to recommend this level of coverage to him.

While emphasizing that the standard of care required in any given situation is highly fact dependent, the Court concluded that in these circumstances, it was open to the trial judge to conclude that the applicable standard of care was as follows:

[A]n Autoplan insurance broker has a stringent duty to provide customers with information, counsel, and advice about all available insurance coverage to meet the customer’s needs, including UMP. So long as the customer adequately describes their situation, the broker must review the customer’s insurance needs and provide the full coverage requested by the customer. However, that duty does not extend to go further and encourage customers to purchase Excess UMP. This is particularly the case for customers who have a history of declining Excess UMP in the past, who do not make any specific inquiries in response to the agent’s explanation of Excess UMP, and who give no sign of a failure to understand the concept of UMP.

The Court noted that even in cases where insurance brokers were found to owe a relatively onerous duty to advise their customers about UMP coverage, “[i]n none of those cases was the duty taken so far as to require the agent to recommend that the insured purchase the coverage in the way the [Plaintiff] would have it” (at para 46). The Court acknowledged a line of cases requiring insurance brokers to provide more extensive advice and warning to their customers but distinguished those cases on the basis that they involved general property insurance or business insurance as opposed to automobile insurance. Per the Court, the key difference is that people are “generally more familiar” with automobile insurance, “subject to it being demonstrated otherwise on the particular facts” (at para 47).

The Court ultimately ruled that it was open to the trial judge to conclude that the agent had fulfilled their duty of care despite not making any particular recommendation on whether the Plaintiff should purchase the excess UMP coverage.

Takeaways

Carriere-de-Davide confirms that the factual context is critical when assessing whether an insurance broker has fulfilled their “stringent” duty to provide customers with advice about their level of coverage. The Court’s analysis in this case suggests that the content of the duty of care will depend on such factors as:

• whether the insurance broker is private or public (at paras 21-22);
• the type of insurance at issue (at para 47);
• the extent to which the customer is familiar with the type of coverage at issue (at para 46); and
• whether there is any indication that the customer’s personal circumstances (e.g., age, residence, and willingness to purchase excess coverage) have changed since their policy was last discussed (at paras 32 and 49).