Goertzen v. Halifax Insurance Co. [2003] M.J. No. 399 Manitoba Court of Queen's Bench

A broker is liable for any gaps in insurance that are not brought to the client’s attention, if the client would have taken steps to avoid an uninsured loss. The fact that the client had been provided a copy of the policy that contained the exclusions, but had not read the policy, does not entitle the broker to claim contributory negligence against the client.

Goertzen purchased all of his insurance policies from his insurance broker, Mr. Friesen. In December 2000, Mr. Goertzen requested that Mr. Friesen place insurance on property owned by Mr. Goertzen on Bonner Street (the "Bonner Property"). The insurance coverage included a vacancy permit. The permit afforded little coverage while the Bonner Property was vacant, and excluded coverage for damage caused by vandalism, malicious acts or water damage. Mr. Goertzen testified that he was unaware of the exclusions under the vacancy permit, despite the fact that he had been denied a previous insurance claim due to exclusions in a vacancy permit. Mr. Goertzen left the house vacant, it was vandalised and suffered extensive water damage. Mr. Goertzen testified that had he been made aware by Mr. Friesen of the exclusions in the vacancy permit, he would have taken steps that would have avoided the damage to the property, or he would have made sure that the property was not vacant. Mr. Goertzen had been provided a copy of the policy which contained the relevant exclusions in it. Mr. Goertzen did not read the policy. He testified that he relied upon Mr. Friesen to advise him of any lapses or exclusions in his insurance coverage.

After the damage was sustained, Mr. Goertzen commenced a claim against Mr. Friesen, and his employer for breach of the duties owed to him by his insurance broker. McKelvey J. found that Mr. Goertzen relied upon Mr. Friesen to advise him of any lapses or gaps in his insurance coverage, that Mr. Friesen did not advise Mr. Goertzen of the vacancy exclusion clauses, and that had Mr. Goertzen been advised of the vacancy exclusion clauses, he would have taken steps to ensure that the property was either insured, or would not have been as extensively vandalised. McKelvey J. awarded Mr. Goertzen damages comparable to what would have been covered by the policy had steps been taken to ensure that the property was not vacant during the time that it was vandalised.

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