Plaintiff’s Claim Against Insurance Brokers Dismissed for Lack of Evidence on Standard of Care

Plaintiff’s claim against defendant insurance brokers dismissed on basis that plaintiff adduced no expert evidence of standard of care and there was sufficient insurance available to plaintiff.

Midas Investment Corp. v. Dominion of Canada General Insurance Co., [2013] O.J. No. 3403, July 22, 2013, Ontario Superior Court of Justice, K.E. Swinton J.

The defendant insurance brokers brought a motion for partial summary judgment seeking an order that the plaintiff’s action against them be dismissed.

The plaintiff suffered an insured loss after the flooding of a commercial building. It sued its insurer for failure to pay the proceeds due under its insurance policy. It also sued its brokers for negligence alleging they had failed to secure adequate coverage and failed to explain the terms of a co-insurance clause.

When the plaintiff sought to be compensated under the insurance policy, the insurer invoked a co-insurance penalty which would have drastically limited the coverage under the policy and led the plaintiff to commence litigation. In the litigation, it was ultimately determined that the co-insurance clause of the policy was not applicable and the damages were within the amount of insurance available under the policy.

The brokers brought this application for summary judgment on the basis that the plaintiff had put forward no expert evidence to raise a triable issue with respect to the standard of care of an insurance agent and on the basis that there was sufficient coverage under the policy and therefore the plaintiff had suffered no loss, at least in respect to the alleged negligence of the brokers. The Court agreed with the brokers’ position and dismissed the claim.

This case was originally summarized by Cameron B. Elder and originally edited by David W. Pilley of Harper Grey LLP.

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