Before concluding an insurance contract, many companies or individuals wish to have a privileged relationship with an intermediary who can advise them on the best product at the most advantageous price and who can assist them during the contract. Our legal expert takes a closer look at this contractual relationship. What is the responsibility of the insurance broker?
Definition of insurance broker responsibility
The insurance broker is the insurance or reinsurance intermediary who connects insurance policyholders with insurance companies, or reinsurance companies, without being bound by them.
To practice in Belgium, the broker must be registered in the register of insurance intermediaries and possess the required professional knowledge.
In addition, they must have sufficient professional integrity, adhere to an extrajudicial complaint handling system, and subscribe to professional liability insurance.
Obligations
The broker has a duty of information and advice towards their client.
To usefully advise their client, the broker must gather information from them and, in particular, know the client’s requirements and needs.
They must also ask any useful questions to their client for the subscription of an insurance policy.
Thus, a broker commits a fault if they merely propose to their clients the subscription of an insurance policy with an unknown company, without drawing the client’s attention to the risks and pitfalls of this coverage.
Conversely, the broker will not be responsible, for example, if they did not draw the client’s attention to certain clauses when they are clear and understandable.
The broker also has a duty of advice towards their client.
The broker’s duty of advice consists of guiding the client in choosing a particular policy with one company or another, after providing the client with all necessary information and establishing a comparison of the costs and merits of each policy considered.
For example, in the context of a “life” product, the broker is only responsible if the investment necessarily leads to heavy losses, regardless of economic circumstances.
In any case, the broker can never be held responsible for deliberately inaccurate statements made by the policyholder when subscribing to the contract.
Responsibility
It is generally considered that the broker’s duties of information and advice constitute obligations of means and not obligations of result, which will impact the burden of proof.
In case of dispute, it will be up to the insured who believes they have been poorly informed and/or poorly advised by their broker to demonstrate the latter’s fault but also to establish that they have suffered damage and especially that there is a causal link between the breach and the damage.
It is therefore up to you to demonstrate that your choice would have been different if you had been properly informed by your broker.