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The professional liability of insurance brokers

Factsheet

Publication date:

31 October 2016

Last updated:

06 November 2018

Author(s):

Christopher Henley, Michelle Radom, Simon Kemp

Provides an outline of the professional liabilities of insurance brokers and describes; how such liabilities can arise at law and how insurance brokers can incur such liabilities in their everyday activities.

Last updated by Simon Kemp and Michelle Radom in October 2016. 

Contents

Legal framework

Insurance brokers owe a series of duties to their principal - the person or entity for whom they are acting as agent. The brokers' principal is usually the insured (and in the case of reinsurance brokers, the reinsured), but brokers may also owe duties to insurers in certain circumstances. Brokers must evaluate and carry out their clients' instructions, and advise them accordingly. Any breach of this duty may give rise to a professional liability claim. Such claims are commonly called "errors and omissions" or E&O claims.

Common law

The insurance broker as a professional

Insurance brokers, like any other professionals, are legally responsible to their principals (and sometimes other parties) for any loss or damage caused by their failure to use reasonable care.

Brokers will owe a duty of care in both contract and tort, although usually these duties are the same. Brokers may not have a written contract with their client but will almost invariably be in a contractual relationship with the client. Even if they are not it will make little difference to their obligations, because "an insurance broker owes a duty of care in negligence towards his client whether the broker is bound by contract or not" (Youell v Bland Welch and Co (1990)).

Brokers may also have a responsibility to the underwriters, for example where they have agreed to undertake a task on their behalf. Under the Marine Insurance Act 1906 ("MIA"), they are also subject to a separate duty to disclose all material facts to insurers prior to the formation of any insurance contract, but in the absence of dishonesty the remedy available to the underwriters was that of avoidance - ie, the underwriters usually had no individual remedy against the brokers (although the insured may have if the brokers have been negligent).

The standard of care to which brokers are subject will vary according to the sophistication of the insured. Brokers will need to be more vigilant if their client is a consumer, rather than a regular buyer of insurance or reinsurance, but that is not to say that the brokers will be able to deny liability solely because their client is sophisticated and well placed to identify any errors made by them.

In Alexander Forbes Europe Limited v SBJ Limited (2002) the judge rejected the suggestion that SBJ, as placing brokers, were allowed to be less vigilant when placing PI insurance for clients who were also professional brokers, because "brokers' duties go beyond those of a post-box". The courts still regard the brokers as primarily responsible and rarely reduce any damages which they award against them by more than 30% to reflect any contributory negligence by the insured.

The insurance broker as agent

Insurance brokers' duty of care to their clients arises out of the law of agency (which is largely contained in the common law, together with any enhancements or modifications required by the FCA or its predecessor the Financial Services Authority "FSA" as contained in its handbook). In particular, brokers owe fiduciary duties to their clients because they occupy a position of special trust and confidence. "The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary" ( Bristol & West Building Society v Mothew (1998)).

The general law of agency requires insurance brokers to:

  • perform all their principal's lawful instructions personally and in a timely fashion;
  • exercise reasonable skill and care in the performance of their principal's instructions;
  • act at all times in the best interests of their principal, to avoid conflicts of interest and to disclose to their principal fully any circumstances which may give rise to the appearance of a conflict;
  • make full disclosure to their principal of their personal interest in any transaction;
  • account to their principal for all monies they may have received on their principal's behalf.

Insurance brokers are usually agents of the insured or prospective insured. When brokers act as agents for both the insured and the insurers, they must obtain the fully informed consent of both parties.

Statute law

There is no statute specifically relating to the obligations of a brokers to their clients, although the MIA did set out the brokers' duties in relation to disclosure (the position has now changed though, following the introduction of the Insurance Act 2015). Brokers were required (jointly with their principal) to see that insurers are fully informed of all material facts necessary to underwrite the risk.

Marine Insurance Act 1906

The MIA codified the existing common law on marine insurance and also reflects the common law applicable to non-marine insurance. It provided that insurers could avoid an insurance contract if, before it is concluded, the insured or the insured's agent "fails to disclose every material circumstance known to them or misrepresents the facts in a material way". Section 19 stated that the brokers must disclose:

  • every material fact known to the brokers, including facts which in the ordinary course of business ought to have been communicated to them; and
  • every material fact which the insured is bound to disclose, unless it comes to the insured's attention too late to communicate to the brokers.

The Court of Appeal in CTI v Oceanus (1984) interpreted the Act as saying that something was material if the prudent insurer would have wanted to take it into account in deciding whether to accept the risk and, if so, on what terms. The views of the actual underwriter were considered to be irrelevant, which enabled some insurers to get out of a bad bargain, even where full and accurate disclosure would in fact have made no difference to an underwriter.

Some of these criticisms were addressed by the House of Lords in Pan Atlantic v Pine Top (1994), so that:

  • a circumstance or misrepresentation is material if the prudent insurer would have wanted to take it into account; and,
  • if materiality is established, the court must also be satisfied that the non-disclosure or misrepresentation "induced" the actual underwriter to accept the risk on those terms.

Pine Top therefore adjusted the test of what is "material" by implying a further requirement in the Marine Insurance Act 1906: that the non-disclosure or misrepresentation "induced" the actual underwriter to accept the risk.

Insurance Act 2015

The Insurance Act 2015 does not entirely repeal the MIA, but it does amend the law significantly in relation to material misrepresentation and non-disclosure. The Act (which applies to all insurance contracts which are subject to English law entered into on or after 12th August 2015 (unless, in the case of non-consumer insurance, the parties contract out), repealed section 19 of MIA. The Act requires an insured to make a fair presentation of the risk "The duty of fair presentation". As mentioned above, insureds are now deemed to know what is known by their brokers and would be revealed by a reasonable search of information available to the insured (which includes information held by the broker).

An insured is not deemed to know confidential information which a broker has acquired through a business relationship with someone who is not connected with the insurance contract (eg another client).

The test for materiality has not been altered by the Insurance Act 2015. However, rather than disclosing all material circumstances, an insured can now instead give the insurer sufficient information to put a prudent insurer on notice that it needs to make further enquiries for the purpose of revealing those material circumstances.

The remedy for a failure to make a fair presentation to insurers remains avoidance (without a return of premium) where the insured has acted deliberately or recklessly. Otherwise, the Act provides for a range of proportionate remedies (depending on the insurer establishing that if there had been no breach of the duty of fair presentation they would not have written the contract or would have done so on different terms.

Contract

Many brokers have formal contracts with their clients that may include clarification or restrictions on the brokers' obligations, and therefore their liability, and any such contract should include any information required by the FCA.

However, matters may become more complicated when there is a chain of brokers and thus a chain of contractual relationships. This can arise, for example, when overseas brokers instruct London brokers to place a risk with the Lloyd's or London market, or where provincial producing brokers have to instruct Lloyd's brokers to gain access to the Lloyd's market. There may be formal terms of engagement in place between each connecting party, but the courts usually take the view that generally there is no contract between the sub-brokers and the insured. In most cases the insured contracts directly and only with the agent which he instructs to obtain the insurance.

Producing brokers and insureds

The producing brokers, as the brokers immediately instructed by the insured and the only brokers with whom the insured usually has a contract, may be liable for breach of an express term of the contract or breach of the implied term to exercise reasonable skill and care. Producing brokers will also be liable to the insured for any defaults of their sub-brokers (under usual agency principles, because the sub-brokers are the agents of the brokers).

Producing brokers and sub-brokers

The sub-brokers owe the producing brokers duties under contract and tort to perform the tasks delegated to them with reasonable care and skill.

Regulation

The duties of insurance brokers may be imposed, clarified or restated by regulation. 

From 14 January 2005 general insurance activity within the UK was regulated by the FSA, the statutory regulator for all insurance mediation activities. Since 1st April 2013, the FCA has been responsible for the regulation of insurance intermediaries in the UK. 

UK brokers may also be subject to regulation by the Attorney General in various US states if they are involved in placing or managing risks domiciled in the US. Such regulation will be determined by agreement reached by the individual broking house with the individual Attorney General.

Failure to comply with FCA regulation or to adhere to any applicable industry codes of practice could provide a claimant with prima facie evidence of negligence on the part of the brokers.

It is important to note, however, the distinction between the common law and the FCA's Rules: the former governs the rights and obligations forming part of the relationship between the broker and the insured, whilst the latter are a voluntary assumption of responsibility by the broker of the appropriate practices as set out by the FCA, and is the price to be paid - by submission to an independent regulator - by the broker in exchange for the right to do business.

A private person may nevertheless take advantage of s.138.D of the Financial Services and Markets Act 2000 "FSMA",  which provides that an action for damages will lie where there is a contravention by an authorised person of a rule made by the FSA if a private person suffers loss as a result of that contravention. However, Kenneth Green (trading as Green Denman & Co) v Skandia Life Assurance Company Limited [2006] states that an insurance company is not subject to an implied term in its dealings with an independent financial adviser that it would not act in breach of its regulatory requirements in its dealings with others (at para 41).

Broking activities

In this section, we look at some of the issues that can arise within the broking process.

Whose agent?

The general rule is that insurance brokers are the agents of the insured. This may appear obvious but one can easily think of situations where the brokers act as agents of the insurer and owe them a duty of care; for example, where the insurers have agreed that notification to the brokers is also notification to the insurer. In fact, many brokers used to have written contracts with insurers (sometimes known as Placement Service Agreements) which set out the duties which they would carry out in return for receiving payments, although in reality these were often related to premium volumes placed with the insurers and the profitability of a brokers' account.

The New York Spitzer review into these contingent commissions questioned the appropriateness of brokers receiving such commissions from insurers. These payments have been standard practice in the insurance market worldwide and still continue, although they were part of an investigation by the European Commission. The European Commission is currently reviewing the Insurance Mediation Directive with the specific aim of introducing clear and effective rules on managing conflicts of interest, including remuneration disclosure in some form.  For more on this, see the separate fact file Insurance in the single market.

The remedies can be very draconian and extend beyond repayment of the commission to the insured as far as rescission of the contract of insurance, but will depend on the facts. (See Wilson v Hurstanger [2007], where a broker negotiating a loan was paid a fee by his consumer clients as well as a commission from the lender. Although the clients were told about the commission in general terms, the broker had breached his fiduciary duty because he did not disclose the actual amount. The lender was also liable to the borrowers.)

The Lloyd's Market Association has restated that brokers are the agents of the insured and are remunerated by fee, brokerage or a combination of both, although brokers should not be paid by both the insured and insurers unless they have both specifically consented to this arrangement.

It used to be thought that brokers were remunerated by the insurers, as payment for the introduction of the business, and this proposition is usually accepted (cf Norreys v Hodgson (1897), Pryke v Gibbs Hartley Cooper [1991]). However, room for argument still persists - see Johnston v Leslie and Godwin [1995], and Carvill America Inc. v Camperdown UK Ltd (2005).

In Carvill America Inc v Camperdown UK Ltd, the Court of Appeal refused an application to set aside service of a claim under English law in the USA. The issues concerned the liability of the reinsurer or reinsured to pay brokerage to the broker, and whether it was earned on placement or when the premium was paid, given the continuing servicing obligations of the broker after placement.

It was argued that the broker deducts his brokerage from the gross premium passing through his hands from the reinsured, before remitting the balance to the reinsurer. On the reinsured's termination of the agency and payment via new brokers of the net premium the Court felt that it was arguable that the liability to pay brokerage reverted to the reinsured.

The Court of Appeal commented that there was "undoubtedly considerable force in the submissions" to the effect that the reinsurer was liable for brokerage, but that it is at least arguable that the obligation only arises on receipt of the premiums.

Dual agency

In certain circumstances brokers could be discharging duties owed to both the insured and the insurers - on the same risk - and thus have a liability to the insurers. Examples include:

  • Operating binding authorities. Operating a binding authority is one of the key ways in which brokers can be agents of insurers. In Pryke and others v Gibbs Hartley Cooper Ltd (1990), the brokers placed an underwriting authority which enabled an agent in the USA to write business on behalf of London market insurers. A risk was written which was outside the terms of the authority and the insurers instructed the brokers to ask the agents to cancel the policy. This was not done and, although the brokers became aware of this, they did not advise the insurers. The insurers could not take steps to limit their exposure and were entitled to damages against the brokers in respect of the subsequent loss.
  • Completing proposal forms. Where insurance brokers are operating a binding authority or other facility, they would be acting on behalf of the insurers if they assisted or completed a proposal form on behalf of an insured.
  • Claims-delegated authority. Brokers are acting as the agents of the insurers when they are authorised to settle claims under delegated authority arrangements. In fact this is a clear conflict of interest because the interests of the insurers and insured are diametrically opposed when claims are involved, and again the insured should consent to this arrangement.

On one aspect of dual agency the law remains clear. In Anglo African Merchants Ltd v Bayley (1970) the court stated that:

In the absence of such express and fully informed consent … it would be a breach of duty on the part of the insurance broker so to act.... Such a relationship with the insurer, inevitably, even if wrongly, invites the suspicion that the broker is hunting with the hounds whilst running with the hare … a custom will not be upheld … if it contradicts the vital principle that an agent may not at the same time serve two masters - two principals - in actual or potential opposition to one another: unless, indeed, he has the explicit, informed consent of both principals.

The FCA stresses the need for brokers to manage actual or perceived conflicts of interest. Broking houses with sizeable and complex operations are drawing clear dividing lines between operations where there are different principals, for example separating the operation of binding authorities and facultative reinsurance from the provision of insurance services to direct insureds. It is important that the broker makes the position clear to the insured. A conflict of interest is a clear breach of the fiduciary duty owed by the broker to the insured at common law.

Which brokers are responsible to the insured?

Whenever brokers are instructed to obtain insurance and employ sub-brokers to place all or part, the dominant presumption is that any sub-brokers are responsible to the brokers, and the original (producing) brokers are responsible to the insured. The doctrine of privity of contract, that someone who is not party to a contract can neither take the benefit of it nor be subject to its obligations, means that the sub-brokers cannot be responsible in contract to the insured. That is not to say that any contract which the sub-brokers form on behalf of the insured will not be binding on the insured, merely that there will not be any contract of agency between the sub-brokers and the insured.

Thus in Pangood Ltd v Barclay Brown and Bradstock Blunt (1999) the insured firm sued the brokers for failing to alert it to the existence of a warranty. The brokers alleged in their defence that they had so informed the insured. They also claimed a contribution from the sub-brokers in the event that the insured was successful in its action, on the basis that the sub-brokers should have explained the requirement of the warranty to the insured and that their failure to do so was negligent and a breach of contract.

The court rejected the possibility that there was any privity of contract or assumption of responsibility between the insured and the sub-brokers. The insured relied on the brokers to receive notice of the terms of the insurance on its behalf and to inform it of any onerous or material clauses. The sub-brokers dealt with their principal, the brokers, on the basis that the brokers were knowledgeable and would communicate with the insured as necessary. There was no duty of care or contract between the sub-brokers and insured and therefore no breach.

There are, however, cases in which the courts have assumed that there was a duty of care owed to the insured by the sub-brokers. These include:

  • Tudor Jones v Crowley Colosso (1996), in which the Court of Appeal held that the blame for not checking that the policy wording (in particular, an exclusion clause) was in accordance with the client's instructions should be apportioned equally between the producing brokers and sub-brokers, although this point was never directly argued.
  • Pryke v Gibbs Hartley Cooper (1990), in which the brokers voluntarily undertook to investigate a problem with a binding authority in the USA. They were not obliged to do so, but on volunteering, they assumed a responsibility to underwriters to exercise reasonable skill, care and diligence in investigating and reporting back. The failure to report resulted in an expensive judgment against them.

However, the extent of any relationship will depend on the closeness of the parties' relationship. In European International Reinsurance Company Ltd v Curzon Insurance Ltd (2003) the insured, Turner & Newell, instructed its brokers, Sedgwick, to find insurance cover for potential asbestos liability in the US. It was agreed that Sedgwick could subcontract the work if necessary and the negotiations were, in fact, conducted by employees of two sub-brokers, referred to in reports as SOL and M, both subsidiaries of Sedgwick. Another subsidiary (SRS) prepared and presented the policy documentation. It was proposed that the insured's captive insurer, Curzon, should front the risk and obtain 100% reinsurance on a facultative basis. Reinsurers subsequently attempted to avoid the reinsurance contract on the grounds of material non-disclosure.

The Court of Appeal held that it was arguable that SOL, M and SRS owed duties of care to Curzon (in addition to that owed by Sedgwick itself). In undertaking the main broking work, SOL and M had assumed responsibility (either directly or vicariously) and, in broking the risk, SRS was acting on its own behalf (involving an assumption of responsibility) and not merely as agent for Sedgwick.

Although this decision must be viewed in context (a "strike-out" application where the issue before the court was whether it was arguable that the three sub-brokers owed a duty of care) the Court of Appeal demonstrated a willingness to consider the existence of an assumption of responsibility by the individual brokers and their employers. Even in situations where the broking company is not known to the insured, there is no guarantee that a duty of care will not be found. In theory, any communication with the insured might result in a court finding an assumption of responsibility by the brokers.

One example of this movement by the courts is BP v Aon (2006). BP had a contract with Aon Texas which contained a limitation clause, but most of the work was carried out by Aon London, which had a close relationship, with repeated direct contact, such that it performed a crucial function in the process of obtaining cover. BP was entitled to infer that Aon London was "undertaking responsibility to provide services in accordance with the proper professional standards of an insurance broker on the London and European markets" . During the negotiations, Aon presented itself to the insured, Amoco (later merged with BP), as an international organisation operating through many different offices worldwide. It did not distinguish between its different corporate components. Adding insult to injury Aon London was not entitled to rely on any contractual provision limiting liability because it was not a party to the contract.

The court distinguished the position in the construction industry involving a chain of written contracts down the subcontracting line, each specifying responsibility for subcontractors' actions. There are a series of cases which state that in that situation only the head contractors are responsible to the client. It may be questionable, however, whether the distinction is as clear-cut as the court suggests. Its analysis is not deep. All that can be said with authority is that an assumption of responsibility by words or conduct may be sufficient to fix sub-brokers with liability to the ultimate principal, which of course is where the law stood before this case.

Fisk v Thornhill & Son (2007) highlights the risk that a sub-broker runs if it fails to inform an insured of all potentially relevant policy terms and conditions, or omits to conduct a thorough investigation before giving any warranty on behalf of the insured.

Fisk had placed property insurance for the insured for several years. For one year it obtained a quotation for an insurance scheme through Thornhill on the basis that the property was constructed of brick, stone, slates and tiles, although there was no express warranty to that effect.

In fact the main part was timber framed. At the end of that policy year, Thornhill (as placing broker) sent a renewal notice to Fisk (as producing broker) but omitted to mention that the proposed policy was with new insurers, CNA, and that it contained new terms including a warranty that the property was constructed of brick, stone, slates and tiles, which was not drawn to the attention of Fisk or to the Insured.

Fisk obtained the insured's consent to the "renewal". The property was subsequently damaged by flood and the policy avoided for breach of warranty. Fisk settled with the insured and sought a contribution from Thornhill under the Civil Liability (Contribution) Act 1978.

The Court of Appeal held that Thornhill, as sub-broker, was in breach of a duty to the insured in failing to draw their attention to the new policy containing new terms. Based on the information received from Fisk in previous years, Thornhill should not have given the warranty to CNA without giving the insured the opportunity to confirm it, because there had been no such warranty in previous years.

The court accepted that Fisk was primarily responsible but that Thornhill's breaches of duty in part had caused the loss. Fisk was therefore entitled to a contribution of 25%. (In fact it had not been disputed in the Court of Appeal that the placing broker owed the insured a duty of care, in which case its contribution of 25% seems low.)

In Crowson v HSBC Insurance Brokers Ltd (2010), HBL agreed with HSBC Insurance Brokers Ltd ("HSBC") to place insurance polices identical to policies that had been arranged by HBL's previous brokers, which included a director's and officer's liability insurance policy. HSBC failed to replace this policy.

HBL's managing director, Mr Crowson, was unable to rely on the policy and brought a claim against HSBC personally for negligence and breach of contract, relying on the Contracts (Rights of Third Parties) Act 1999. At the application to strike out (which has lower standards of proof than a full trial) the brokers tried to utilise cases such as Verderame v Commercial Union Assurance Co Plc [1995], in which the Court of Appeal held that the broker's client was the company, and not the claimant directors, so that no duty of care could be owed to the claimant on the basis of the doctrine of separate corporate personality.

The master held that it was at least arguable that Mr Crowson had a valid claim against HSBC despite the fact that it was HBL rather than Mr Crowson who had contracted with HSBC. The master considered that a broker could be liable in tort to a person who had not appointed him:

(i) where a broker is instructed to arrange insurance for the person instructing him and for others, and

(ii) where a policy is intended to benefit a third party.

In this case, HSBC knew that Mr Crowson was the managing director of HBL and that he and the other directors required a director's and officer's insurance policy. Mr Crowson also gave instructions to HSBC on behalf of HBL and himself and was, arguably, therefore acting as an agent for the other directors.

Further, the Contracts (Rights of Third Parties) Act 1999 could be used by Mr Crowson to enforce the contract because the contract conferred a benefit on him under section 1(1)(b) of the Act as - insurance as a director, and under section 1(3) he was expressly identified as a member of a class.

Material facts

We have seen earlier  the role brokers play in the process of disclosure to insurers. The following points have been established by the courts:

  • If agents breach their duty by failing to ask the insured questions which are known to be material but whose materiality the insured does not appreciate, they will be liable to the insured if the insurers subsequently avoid the policy ( McNealy v Pennine Insurance Co (1978 )). (Business insureds still have a duty to volunteer material information, even in the absence of a question from the insurer, following the introduction of the Insurance Act 2015. However, it should be noted that, following the introduction of the Consumer Insurance (Disclosure and Representations) Act 2012 (which came into force on 6th April 2013) consumer insureds do not have to volunteer information and so it would appear that the broker does not have a duty to elicit material information from its client where the insurer has failed to seek that information itself).
  • In Dunbar v A&B Painters Ltd and Economic Insurance Co Ltd and Whitehouse & Co (1986) insurance brokers were held responsible for their failure to disclose correct claims information to the insurers. Their negligence resulted in an employers' liability policy being invalid and the brokers were liable for the losses invurred by the insured as a result.

The duty to disclose all material information (or to make a fair presentation, after the introduction of the Insurance Act 2015) obviously applies at inception of the policy, but is also reimposed each time the policy is renewed or extended, or if the brokers become aware of a change which alters the subject matter of the insurance, such that the amended risk is not one which the insurers intended to cover.

It should also be noted that the duty is one of proper disclosure; not merely to direct the insurers to a potential source of the material facts. For example, although it has not yet been tested in the courts, it is doubtful whether brokers who suggest that an underwriter should consult the proposer's website for background could claim to have discharged their duty to disclose any material information the site may contain. The underwriter does not have to act as a detective.

Providing information or advice?

Insurance brokers must also take care to distinguish between an information case and an advice case. In the SAAMCO case, South Australia Asset Management Corporation v York Montague Ltd (1997), a case involving a property valuation, the House of Lords decision drew a crucial distinction between:

  • a duty to provide information for the purpose of enabling another to decide upon a course of action; and
  • a duty to advise another what course of action to adopt.

If the duty is to provide information, the informants should use reasonable skill and care to ensure that their information is correct and, if they are negligent, they will be responsible for all of the reasonably foreseeable consequences of that information being wrong.

If the duty is to advise on a course of action, the advisers must take reasonable care to consider all of the potential consequences and, if the advice is negligent, they will be responsible for all of the reasonably foreseeable loss that is a consequence of that course of action being taken.

In SAAMCO, the defendant only had a duty to provide information, so the recoverable loss was restricted to the difference between the negligent valuation and the correct valuation. However, this case demonstrated that insurance brokers can be exposed to a loss greater than the amount for which they have been asked to arrange cover.

It used to be thought that brokers' liability could be limited to the value of the cover which they should have obtained. However, in Aneco Reinsurance Underwriting v Johnson and Higgins Ltd (2001), Johnson & Higgins acted as brokers for Aneco, a Lloyd's syndicate, obtaining $11m reinsurance cover for them. On the strength of this reinsurance cover, Aneco underwrote some risks but subsequently suffered a $35m loss. In the meantime, Aneco's reinsurers avoided the reinsurance policy on the grounds that Johnson & Higgins had failed to make a full disclosure of all material facts.

The House of Lords held that Johnson & Higgins had negligently failed to advise that adequate reinsurance was not available for an insurance treaty that their client insurer, Aneco, had entered into, and it was accepted that Aneco would not have entered into the treaty if it had known the true facts. Consequently, the true measure of Aneco's loss was not just the $11m reinsurance shortfall but their entire loss of $35m, on the grounds that the insurer would not have entered into the treaty if it had received proper advice.

In contrast to the SAAMCO case, Johnson & Higgins were held to have been giving advice and were therefore responsible for all of the reasonably foreseeable consequences of their negligence.

The case also illustrates a common cause of E&O claims that is sometimes overlooked when brokers are immersed in difficult negotiations with insurers. By the brokers' failure to keep the clients informed on progress (or lack of it), the clients were denied the knowledge that they were not adequately insured, and thus the opportunity of making other arrangements or suspending the activities concerned.

 An amendment to the Insurance Act 2015, which will come into effect on 4th May 2017, will introduce an implied term into every (re)insurance contract that a (re)insurer must pay any sums due in respect of a claim made by the insured "within a reasonable time". A breach of this implied term will give rise to a possible claim for damages.

(Re)insurers will be able to contract out of these changes (although not in respect of consumer insurance). However, contracting out will not be permitted where there has been a deliberate or reckless breach by the (re)insurer.

What is clear, however, is that brokers have a duty to take reasonable steps to ensure that their client properly understands the nature of the insurance cover and particularly to draw to their attention to any unexpected exclusion, or obligation that requires action or compliance by the insured. This requirement to advise exists both at common law and in the FCA Handbook Insurance: Conduct of Business Sourcebook 6.1.5R and 6.1.7G.

The broker should:

  • advise the insured of the duty to make a fair presentation;
  • explain the consequences of a failure to discharge it;
  • indicate the type of fact that might be material;
  • take reasonable care to elicit matters which ought to be disclosed but whose significance the insured might not appreciate; and
  • must "satisfy himself that the position is in fact understood by his client {which} will usually require a specific oral or written exchange on the topic, both at the time of the original placement and at renewal)" ( Jones v Envirocom Ltd [2010]).

In J W Bollom v Byas Mosley (2000) the brokers were held liable for failing to advise their client about an alarm warranty that applied to the client's property insurance.In Ground Gilbey Ltd v Jardine Lloyd Thompson UK Ltd [2011] the brokers were held liable for failing to advise their clients of a survey condition introduced by the insurers on renewal, as well as failing to pass on various emails requiring action which the insured was able to prove that it would have effected had it been properly informed.The brokers' role following inception of cover as a matter of fact was to communicate information to the insured which might affect the coverage.

Choice of insurers and market security

The vexed question of the responsibility of insurance brokers for the financial stability of the markets they recommend to their clients has assumed even greater prominence following several high-profile insurer collapses.

It is a principle of English law that insurance brokers do not guarantee the performance of markets they use to place their clients' business. However, brokers are under a duty to exercise reasonable skill and care in:

  • the selection of insurers which are generally financially sound, which in effect means that they are able to pay present and future claims;
  • satisfying themselves that the security used is reasonably appropriate for the business being insured.

The FCA Handbook, Insurance Conduct of Business "ICOBS", underlines this duty by requiring intermediaries to match the insurer and insurance contract they are recommending to the client's "demands and needs".

When a client instructs the brokers to use particular insurers and the brokers recommend otherwise, the brokers should both record their advice to the client in writing and also record that they are using those insurers on the client's instructions.

Brokers who know that particular insurers have financial difficulties but continue to place insurance with them will potentially be liable in negligence ( Osman v J Moss (1970)). If, during the policy period, brokers remove insurers from their security list or downgrade them to a level below their usual minimum level, there may be a duty to inform the client. The broker could be liable for any failure so to inform if the insured could show that it had been deprived of an opportunity to obtain alternative cover (albeit upon payment of an additional premium), and had suffered a loss as a result.

The position may be different where the broker's client is a professional in the reinsurance market, who was responsible for assessing the suitability of the security for the reinsurance: see Berriman v Rose Thompson Young [1996].

The comment of Longmore LJ in HIH Casualty & General Insurance Ltd v JLT Risk Solutions Ltd (2007) (see the section "Duties once insurance is in place" below) is not an indication that the broker is obliged to monitor any security post-placement but rather that if it becomes aware of any aspect of the ongoing solvency of the security or its ability to meet claims timeously, it should inform the insured and seek its instructions.

Preparation of wordings

Wordings prepared by brokers have been the subject of several errors and omissions claims. Where the brokers are involved in the preparation of a wording and that wording is defective and results in loss to the insured, then they are likely to be liable for that loss to the insured.

It now seems clear that the broker is under a duty to prepare a wording (see the Contract Certainty Code of Practice (2007), despite the fact that a contract of insurance need not be in writing (unless marine).

The most recent statement of the broker's duties is Dunlop Haywards (DHL) Ltd. v Barbon Insurance Group Limited [2009] in which Hamblen J stated that it was common ground between the parties that the broker is obliged "to use reasonable skill and care to draw up a policy, or to ensure that a policy was drawn up, that accurately reflected the terms of the agreement with the underwriters and which was clear and unambiguous so that the client's rights under the policy were not open to doubt".

It is not a discharge of this duty if the insured finds themselves with "doubtful or uncertain rights" (see Ground Gilbey v JLT [2011] above). Even if it were not his job, if the broker participates in drafting they are obliged to conform to the standard of a reasonably competent draftsman in the appropriate area. See, for example Youell v Bland Welch & Co The Superhulls Cover Case [1990] where it was said that: "the brokers were bound to exercise reasonable skill and care in drafting these documents so as to ensure that they gave clear expression to the terms that had been agreed. They failed to do so".

Where the brokers prepare the wording for the insured, any ambiguity in any clause relied on by the insured will be construed against the insured (Abrahams v Mediterranean Insurance and Reinsurance Co Ltd (1991)). If all the terms have been clearly agreed and the wording is therefore an administrative act only, the brokers may act as the common agent of the parties and are only reflecting a clear agreement - that is, they are fulfilling an administrative role only for both parties, so that the contra proferentem rule cannot apply. This is not always an easy area to dissect with clarity or precision.

Contract certainty

The absence of an agreed policy document covering the destruction of the Twin Towers led to wide public debate about the time it then took the insurance industry to issue policy wordings. This culminated in a statement from the then FSA in December 2004 with the insurance industry being given two years to end the "deal now, detail later" culture.

A number of market initiatives blossomed to deliver "contract certainty", the main one being taken forward by the Market Reform Group (focused on Lloyd's and the London subscription market), with a parallel group addressing the issue within the non-subscription market.

Certain key principles were agreed and are:

  • Contract certainty focuses on the understanding and agreement between the insured and their insurers - not the issue of the policy document: "Contract certainty is achieved by the complete and final agreement of all terms, including signed-down lines, between the insured and insurers before inception."
  • Achieving this is done by the production of the Market Reform Contract "MRC" and fully claused, market presentations or submissions. In effect, all cover requests must be set out in writing at the time the risk is broked to insurers.
  • Wordings are to be presented at the time of placing.

This process enables the insured to receive evidence of coverage within a prompt timescale as required by ICOBS and should provide "correct" evidence of the actual coverage agreed.

However, although a policy document is the end result of this process, the key activity will remain obtaining agreement and understanding between insured and insurers - the brokers' prime function. As we have seen, it is when an insured's expectations are not met at the time of a loss that brokers could be exposed to an E&O claim. Focusing purely on document production without regard to the content could lead, at worst, to clear evidence being in place that the brokers had not achieved agreement and understanding between their client and insurers.

Duties once insurance is in place

A broker's duties do not end once the contract of insurance has been formed. The broker should ensure that:

  • any premium payment clause is complied with;
  • the insured understands their duty of notification;
  • any subjectivities are discharged and removed; and (of course)
  • to assist an insured in the presentation and processing of any claims.

The overarching duty, perhaps, is to ensure that insureds understand any restrictions, conditions or warranties in the policy, so that they can comply with them. As always, such notification or clarification should be in writing to prevent later dispute. Brokers should monitor the insured's requirements and ensure that the insurance arrangements are adequate and up to date at the time of placement: Fraser v B Furman (Productions) Ltd (1967) and Dunbar v A&B Painters Ltd (1986).

Cherry v Allied Insurance Brokers (1978) indicates that the brokers are under a duty to notify the insured if they are aware that the insured has become uninsured. The individual scope of service agreement should determine the extent of any brokers' duty to warn the insured of renewal, although the FCA has intervened to set out rules whereby the holding insurers must give notice "in good time" if they do not intend to offer renewal terms and such notice must in turn be conveyed to the insured.

In HIH Casualty & General Insurance Ltd v JLT Risk Solutions Ltd (2006) (one of the London market film finance cases) it was stated that the scope of any duty owed by the brokers post-placement would always depend on the circumstances of the case. HIH alleged that JLT (in its capacity as HIH's reinsurance broker) should have specifically drawn to HIH's attention the reductions in the numbers of insured or reinsured films and their significance with respect to the contracts.

The Commercial Court held that in simply forwarding the risk management reports (which revealed that there was a reduction in the number of films to be made) to HIH and not alerting them to the potential coverage issues that this might cause, JLT had failed in its duty of care. It refused to accept that JLT was obliged only to act as a postbox, and this was confirmed by the Court of Appeal. It felt that JLT should have read the risk management reports carefully, and if any of the information contained in them would have been a matter of potential concern to the client from a coverage point of view then JLT should have alerted the client to this information. Merely forwarding the information was not enough to discharge any duty. In the absence of instructions from HIH to notify reinsurers, JLT had a duty to seek instructions from HIH or at least to ensure that HIH was sufficiently aware of the potential concern to assess what, if any, instructions to give.

Longmore LJ took an even broader view to the effect that this post-placement duty should not be confined to particularly risky or complex arrangements: " … an insurance broker who, after placing the risk, becomes aware of information which has a material and potentially deleterious effect on the insurance cover which he has placed is under an obligation to act in his client's best interest by drawing it to the attention of his client and obtain [sic] his instructions in relation to it". 

Longmore LJ laid down the general duty by stating that:

an insurance broker who, after placing the risk, becomes aware of information which has a material and potentially deleterious effect on the insurance cover which he has placed is under an obligation to act in his client's best interest by drawing it to the attention of his client and obtain his instruction … as between a lay client unversed in insurance matters and his insurance broker, I would think that the existence of such a duty would be relatively uncontroversial.

Even if the discharge of this duty might result in a conflict of interest for the broker, as might occur in situations where the broker has placed the insurance and corresponding reinsurance, the fact is that it has assumed duties to both parties and must discharge them; the existence of a conflict does not mean that a duty to one party should not exist or that one takes precedence over the other.

The same brokers were involved in Great North Eastern Railway Limited v JLT Corporate Risks Limited [2007]. GNER had obtained insurance cover with Avon Insurance PLC through the brokers JLT. GNER and JLT believed the insurance contained a narrow exclusion but Avon believed that they were contracting on the basis of the expiring wording.

By the time of derailment in 1988, JLT were still discussing matters relating to the policy wording with Avon and no final wording had been produced. Following various pieces of litigation with insurers and third parties, a dispute ended up before Cresswell J which included a limitation point, which itself depended on whether there was any continuing duty on the part of JLT; if not then the proceedings had been issued out of time.

Cresswell J found that there was the possibility that the brokers would owe a continuing duty of care, but that the Court would be assisted by hearing expert evidence as to the extent and nature of any continuing duties owed by JLT in relation to obtaining an agreed policy wording after inception (which was not before him on that interim application). It would be surprising if such a duty did not exist, but a more substantive judicial pronouncement on this specific point is awaited with interest.

In Equitas Ltd & Anor v Walsham Brothers & Co Ltd [2013], the insurer claimed that the broker had failed to remit to it substantial sums (namely, payments of claims and returns of premium from its reinsurers and reinstatement premiums to its reinsurers). The main issue in this case was whether the claim was time-barred. This in turn depended on the nature of the duties owed by the broker to the insurer (and, in particular, whether continuing duties had been owed by the broker).

Males J held that the broker had a contractual duty to remit funds promptly. Although the "starting point" was that a duty to remit funds is likely to require performance once and for all, that duty was a continuing one in this case because of certain key features (e.g. the parties' relationship was a long-term one and the broker had a continuing obligation to deal with claims and administer the relevant policies over a number of years). Furthermore, had the broker discovered that he had mistakenly failed to remit funds more than six years after he ought to have done so, the parties would have expected the funds to be paid at that point.  As a result, a fresh cause of action arose on each day that the broker failed to make a remittance which it ought to have made and the claim was not time-barred.

When a broker assumes responsibility in any area, it will have to discharge that responsibility as if it were a competent professional operating in that area. For example in a case where brokers voluntarily undertook to investigate a problem with a binding authority in the USA. Although they were not obliged to do so, as soon as they volunteered, they assumed a responsibility to underwriters to investigate, exercise reasonable skill, care and report diligence in investigating and reporting back. The failure to report resulted in an expensive judgment against them.

Renewal

In Beazley Underwriting Ltd v Travelers [2011], the court held that the broker effecting a renewal is "subject to the same duty as is imposed on a broker at an original placement, namely a duty to take reasonable care to ensure that his client's insurance needs are clearly met. That is part of the reason why he gets paid as much on renewal as on placement".

Records

Claims can be made long after a period of insurance has expired or a policy has lapsed and in such circumstances the client and the client's brokers will need to trace records of old policies.

In Johnston v Leslie & Godwin Financial Services Ltd (1995), the brokers were unable to locate documents, and in particular the placing slips which identified the insurance companies on risk in respect of losses which occurred under policies written in the 1950s but which only became manifest in the 1980s. The judge held that the brokers were in breach of their contractual duty to exercise reasonable skill and care in retaining the documents.

Two further aspects of this judgment are worth noting:

  • In response to the argument that the claim was time-barred, the judge held that the duty to retain documents was a continuing duty to be in a position to provide documents as and when requested by the insured.
  • The judge suggested that the brokers owe a duty not to destroy a policy or slip without seeking the instructions of the insured - whether or not, it would seem, a claim was still possible.

Lloyd 's brokers are also required to maintain adequate records of contracts, including MRC's slips, the policy or wording and any endorsements. These records must be retained for betweem 15 years or 80 years, depending on the type of insurance and claims position.

Termination of appointment

Insurance brokers can still incur liability even when their appointment has been terminated.

In Cherry Ltd v Allied Insurance Brokers Ltd (1978), Allied's appointment was cancelled and new brokers were instructed. There were two business interruption policies, one through Allied and the other through the new brokers. Due to a misunderstanding both policies were cancelled and when a loss occurred Cherry had no cover. Allied was held liable for the loss caused to Cherry by its cancelling the insurance.

In Yasuda Limited v Orion Underwriting Limited (1995) the defendants acted as underwriting agents for the claimant under various underwriting agency agreements. For practical reasons these agreements provided that although all records were to be the property of the underwriting agent, the claimant was entitled to inspect and take copies of "all necessary books, accounts, records and other documentation". Following termination of the contract the underwriting agent refused the claimant access to any documents.

Having held that there existed an agency at common law, and that the contract merely supplemented this, the court stated:

The nature of the defendant's mandate was such that, subject to express qualification by the terms of any agency agreement, they were in the course of the agency clearly under a general duty to keep and provide records of all transactions into which they had entered on behalf of the plaintiff including those which were in the process of being run-off … The nature of the duty to keep and provide records in such a case would, by necessary implication, involve full disclosure of records of all transactions and the current state of premium, outstanding claims and reinsurance protection in relation to each.

He is entitled to be provided with those records because they have been created for preserving information as to the very transactions which the agent was authorised by him to enter into. Being the participant in the transactions, the principal is entitled to the records of them …

… the agent's duty to provide records of transactions to the principal is founded on the entitlement of the principal to the records of what has been done in his name …

Brokers must also be careful if they take any steps during the policy period, because to do so might restart the limitation period if they repeat any previous negligence (see Gaughan v Tony McDonagh & Co (2005)).

Further Information

Legislation  

Rules

Case law

Abrahams v Mediterranean Insurance and Reinsurance Co [1991] 1 Lloyd's Rep 216, CA (Civ Div)

Alexander Forbes Europe Ltd (formerly Nelson Hurst UK Ltd) v SBJ Ltd [2002] EWHC 3121; [2003] Lloyd's Rep IR 432; [2003] Lloyd's Rep PN 137; [2003] PNLR 15

Alfred James Dunbar v A&B Painters Ltd and Economic Insurance Co Ltd and Whitehouse & Co [1986] 2 Lloyd's Rep 38, CA (Civ Div)

Aneco Reinsurance Underwriting Ltd (in liquidation) v Johnson & Higgins Ltd [2001] UKHL 51; [2001] 2 All ER (Comm) 929; [2002] 1 Lloyd's Rep 157; [2002] CLC 181; [2002] Lloyd's Rep IR 91; [2002] PNLR 8, HL

Anglo African Merchants Ltd v Bayley [1970] 1 QB 311; [1969] 2 WLR 686; [1969] 2 All ER 421; [1969] 1 Lloyd's Rep 268; 113 SJ 281

Arbory Group Ltd v West Craven Insurance Services [2007]

Beazley Underwriting Ltd v Travelers [2011] EWHC 1520 (Comm)

Berriman v Rose Thompson Young [1996] LRLR 429

BP Plc v AON Ltd (No 2) [2006] EWHC 424; [2006] 1 All ER (Comm) 789; [2006] 1 CLC 881; [2006] Lloyd's Rep IR 577; (2006) 103 LSG 31

Bristol and West Building Society v Mothew (t/a Stapley & Co) [1998] Ch 1; [1997] 2 WLR 436; [1996] 4 All ER 698; [1997] PNLR 11; (1998) 75 P& CR 241; [1996] EGCS 136; (1996) 146 NLJ 1273; (1996) 140 SJLB. 206; [1996] NPC 126, CA (Civ Div)

Carvill America Inc v Camperdown UK Ltd [2005] EWCA Civ 645; [2005] 2 Lloyd's Rep 457; [2005] 1 CLC 845; [2006] Lloyd's Rep IR 1, CA (Civ Div)

Cherry Ltd v Allied Insurance Brokers Ltd [1978] 1 Lloyd's Rep 274

Container Transport International Inc v Oceanus Mutual Underwriting Association (Bermuda) Ltd (No 1) [1984] 1 Lloyd's Rep 476, CA (Civ Div)

Crowson v HSBC Insurance Brokers Ltd (2010) (Unreported)

Dunlop Haywards Limited and others v Barbon Insurance Group Limited (formerly known as Erinaceous Insurance Services Limited) and others [2009] EWHC 2900 (Comm)

Equitas Ltd & Anor v Walsham Brothers & Company Ltd [2013] EWHC 3264 (Comm)

Eurokey Recycling Ltd v Giles Insurance Brokers [2014 EWHC 2989 (Comm),
  
European International Reinsurance Co Ltd v Curzon Insurance Ltd [2003] EWCA Civ 1074; [2003] Lloyd's Rep IR 793; (2003) 100(36) LSG 43; (2003) 147 SJLB 906, CA (Civ Div)

Fisk v Brian Thornhill & Son [2007] EWCA Civ 152

Fraser v BN Furman (Productions) Ltd [1967] 1 WLR 898; [1967] 3 All ER 57; [1967] 2 Lloyd's Rep 1; 2 KIR 483; (1967) 111 SJ 471, CA (Civ Div)

Gaughan v Tony McDonagh & Co Ltd [2005] EWHC 739; [2006] Lloyd's Rep IR 230; [2005] PNLR 36

Goshawk Dedicated Ltd v Tyser & Co Ltd [2005] EWHC 461; [2005] 2 All ER (Comm) 115; [2005] Lloyd's Rep IR 379

Grace v Leslie & Godwin Financial Services Ltd [1995] LRLR 472; [1995] CLC 80

Great North Eastern Railway Limited v JLT Corporate Risks Limited [2007] Lloyd's Rep. IR 38

Ground Gilbey Ltd v Jardine Lloyd Thompson UK Ltd [2011] EWHC 124 (Comm)

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465; [1963] 3 WLR 101; [1963] 2 All ER 575; [1963] 1 Lloyd's Rep 485; 107 SJ 454, HL

HIH Casualty & General Insurance Ltd v JLT Risk Solutions Ltd (formerly Lloyd Thompson Ltd) [2007] EWCA Civ 710; [2007] Lloyd's Rep IR 717, CA

Hurstwood Developments Ltd v Motor & General & Andersley & Co Insurance Services Ltd [2001] EWCA Civ 1785; [2002] Lloyd's Rep IR 185; [2002] Lloyd's Rep PN 195; [2002] PNLR 10, CA (Civ Div)

Insurance Co of Africa v Scor (UK) Reinsurance Co Ltd [1985] 1 Lloyd's Rep 312, CA (Civ Div)

Iron Trades Mutual Insurance Co Ltd v JK Buckenham Ltd [1990] 1 All ER 808; [1989] 2 Lloyd's Rep 85

Johnston v Leslie and Godwin [1995] LRLR 472

Jones v Envirocom Ltd [2010] EWHC 759 (Comm)

J W Bollom & Co Ltd v Byas Mosley & Co Ltd [2000] Lloyd's Rep IR 136; [1999] Lloyd's Rep PN 598

Kennecott Utah Copper Corp v Minet Ltd [2003] EWCA Civ 905; [2004] 1 All ER (Comm) 60; [2003] Lloyd's Rep IR 503; [2004] PNLR 10, CA (Civ Div)

Kenneth Green (trading as Green Denman & Co) v Skandia Life Assurance Company Limited [2006] Case No: HC 03 C 00580 EWHC 1626 (Ch)Leicestershire CC v Michael Faraday and Partners, Ltd [1941] 2 KB 205, CA

Lloyds TSB General Insurance Holdings Ltd v Lloyds Bank Group Insurance Co Ltd [2003] UKHL 48; [2003] 4 All ER 43; [2003] 2 All ER (Comm) 665; [2003] Lloyd's Rep IR 623; [2003] Pens LR 315; (2003) 153 NLJ 1270; (2003) 147 SJLB 935, HL

Markel International Insurance Co Ltd v Surety Guarantee Consultants Ltd [2008] EWHC 1135 (Comm)

McNealy v Pennine Insurance Co [1978] 2 Lloyd's Rep 18; [1978] RTR 285; 122 SJ 229, CA (Civ Div)

Merrett v Babb [2001] EWCA Civ 214; [2001] QB 1174; [2001] 3 WLR 1; [2001] BLR 483; (2001) 3 TCLR 15; 80 Con LR 43; [2001] Lloyd's Rep PN 468; [2001] PNLR 29; [2001] 1 EGLR 145; [2001] 8 EGCS 167; (2001) 98(13) LSG 41; (2001) 145 SJLB 75, CA (Civ Div)

Midland Mainline Ltd v Commercial Union Assurance Co Ltd [2003] EWHC 1771; [2004] Lloyd's Rep IR 22

Nisshin Shipping Co Ltd v Cleaves & Co Ltd [2003] EWHC 2602; [2004] 1 All ER (Comm) 481; [2004] 1 Lloyd's Rep 38; (2003) 153 NLJ 1705

NLA v Bowers [1999] Lloyd's Rep. 109, 112

Norreys v Hodgson (1897) 13 T.L.R. 421Osman v Moss (J Ralph) [1970] 1 Lloyd's Rep 313, CA (Civ Div)

Pan Atlantic Insurance Co Ltd v Pine Top Insurance Co Ltd [1995] 1 AC 501; [1994] 3 WLR 677; [1994] 3 All ER 581; [1994] 2 Lloyd's Rep 427; (1994) 91(36) LSG 36; (1994) 144 NLJ 1203; (1994) 138 SJLB 182, HL

Pangood Ltd v Barclay Brown & Co Ltd [1999] 1 All ER (Comm) 460; [1999] Lloyd's Rep IR 405; [1999] Lloyd's Rep PN 237; [1999] PNLR 678, CA (Civ Div)

Pryke v Gibbs Hartley Cooper Ltd [1991] 1 Lloyd's Rep 602

Punjab National Bank v De Boinville [1992] 1 WLR 1138; [1992] 3 All ER 104; [1992] 1 Lloyd's Rep 7; [1992] ECC 348; (1991) 141 NLJ 85, CA (Civ Div)

South Australia Asset Management Corp v York Montague Ltd [1997] AC 191; [1996] 3 WLR 87; [1996] 3 All ER 365; [1996] 5 Bank LR 211; [1996] CLC 1179; 80 BLR 1; 50 Con LR 153; [1996] PNLR 455; [1996] 2 EGLR 93; [1996] 27 EG 125; [1996] EGCS 107; (1996) 93(32) LSG 33; (1996) 146 NLJ 956; (1996) 140 SJLB 156; [1996] NPC 100, HL

Strive Shipping Corporation v Hellenic Mutual War Risk Association (Bermuda) Ltd., (The "Grecia Express") [2002] Lloyd's Rep. IR 669

Tudor Jones v Crowley Colosso Ltd [1996] 2 Lloyd's Rep 619

Verderame v Commercial Union Assurance Co Plc [1995] PNLR 612

Wilson v Hurstanger [2007] EWCA Civ 299

Yasuda Fire & Marine Insurance Co of Europe Ltd v Orion Marine Insurance Underwriting Agency Ltd [1995] QB 174; [1995] 2 WLR 49; [1995] 3 All ER 211; [1995] 1 Lloyd's Rep 525; [1994] CLC 1212; [1995] 4 Re LR 217

Yechiel v Kerry London Ltd [2010] EWHC 215 (Comm)

Youell v Bland Welch & Co Ltd (No 1) [1992] 2 Lloyd's Rep 127, CA (Civ Div)

Useful publications

Useful websites

This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.