The facts of Bronfman v. BFL Canada Risk, (2013) ONSC
5372 appear to be taken from the script of a Hollywood movie.
In November 2008, thieves broke into Paul and Judy Bronfman's
home while they were out for the evening. Not bothering to
fuss with trying to open a safe located on the second floor of the
home, the thieves opted instead to take the entire safe. The
safe contained expensive jewellery, $50,000.00 in cash and other
valuables, including two 1970s-era Montreal Canadiens Stanley Cup
rings. The thieves were never apprehended and the valuables were
Upon notifying their insurance broker of the break-in, the
Bronfmans were informed that their available policies provided for
$20,000.00 in coverage for jewellery and $1,500.00 for cash.
Left out-of-pocket and uninsured for most of their losses, the
Bronfmans engaged legal counsel and headed to court.
Five years later, they won their legal battle at trial. The
central question before Madam Justice Stewart was the scope of an
insurance broker's duty to ensure that the client's
insurance adequately covers their needs. Ultimately, Justice
Stewart found that the Bronfman's insurance broker was
negligent in failing to adequately review their needs and advise as
to suitable coverage.
THE INSURANCE COVERAGE
In 2004, the Bronfmans had switched brokers. In early 2005, the
new broker sent a letter to the stating, "All documentation
has now been received from [the insurer] and we will be contacting
you shortly to review the present coverage for both the house and
cottage prior to the anniversary date of April 1st."
Unfortunately, and perhaps one of the key facts at trial, the new
broker did not in fact meet with the Bronfmans nor did he undertake
a review of their coverage as set out in his letter.
Mr. Bronfman stated that he always believed that their contents
insurance also applied to their jewellery. He testified that he
paid little or no attention to the covering letters he received
with renewals of the underlying policies.
SUCCESS AT TRIAL
In her trial decision, Justice Stewart considered the case law
setting out an insurance broker's duty to his
client. An insurance broker is required to use a
reasonable degree of skill and care when asked to obtain a specific
type of coverage and to inform the client promptly if such coverage
is not available. If the client provides no specific
instruction on the type of coverage required and instead relies on
their broker, the broker - if he agrees to act on such terms - must
inform himself of the client's circumstances in order to assess
the foreseeable risks and to insure his client against them.
Justice Stewart held that the broker did not meet with the
Bronfmans to discuss their insurance needs and coverage, nor did he
review the nature of their personal property or tour their home. In
sending out generic renewal letters, the broker had operated
mechanically and only did the bare minimum with little
consideration of their insurance needs. Counsel for the
broker argued that a standard form letter can discharge an
insurance broker of their duty of care: however, Justice Stewart
was not persuaded in the circumstances given that the broker was
aware of the Bronfmans' wealth and lifestyle.
Justice Stewart also held that if the Bronfmans had been advised
of the gap in their insurance coverage, they would have taken steps
to purchase such insurance and would have obtained all necessary
appraisals. This conclusion was based on the finding that the
Bronfmans could easily afford to pay the additional premiums for
increased coverage, and to do so would be the sensible and
reasonable course of action in their circumstances.
The Bronfmans were awarded damages equal to the extent of
coverage that they likely would have obtained had they been
properly advised of its availability, less the cost of purchasing
The decision is currently under appeal, and we will watch for
the result with interest. In the meantime, insurance brokers
should be wary of relying on simple form letters setting out
insurance coverage as a means of fulfilling their professional
duties. Brokers would be wise to investigate any obvious coverage
gaps, and follow through on any offers made to review clients'
coverage in greater detail.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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