Post-contractual duty

In Ground Gilbey Ltd and Anr v Jardine Lloyd Thompson UK Ltd [2011] EWHC 124 (Comm) Blair J confirmed that a broker owes duties after the inception of the risk to take reasonable steps to ensure that the assured is kept aware of events that might prejudice coverage. A further important matter discussed in this case is the ability of brokers to challenge the amount of a settlement reached between the assured and the underwriters when the assured wishes to recover the shortfall from the brokers.

Ground Gilbey: the facts

In March 2005 the claimants, the owners of Camden Market in North London, first instructed the defendant brokers, Jardine Lloyd Thompson, to place insurance. JLT arranged for a survey to be conducted by Fusion Insurance, the underwriting agents for Aviva Insurance Ltd. That took place on 17 March 2005, a quotation was issued by Fusion on 23 March 2005 and policy was duly issued at the end of the month. The policy covered material damage, loss of rent, liability and terrorism. The policy was renewed in 2006 and 2007. The amount of material damage then in place exceeded £60m.