Insurance brokers: duties of advice

It has long been settled that the overriding duty of an insurance broker is to protect the assured against litigation risks. In Dalamd Ltd v Butterworth Spengler Commercial Ltd [2018] EWHC 2558 (Comm) the insurers denied liability for loss caused by a fire by reason of non-disclosure and breach of policy terms. The assured alleged that these breaches were by reason of the failure of the broker to give proper advice on what had to be disclosed and on the existence and meaning of the conditions of the policy.

However, unlike the position in previous cases, the assured did not pursue the insurers and instead brought proceedings directly against the broker. That raised the question for Butcher J of whether it suffices for the assured to rely upon the insurers’ denial of liability as the basis for a claim against the broker.