On or about 16 August 2017 the Plaintiff entered into a contract of insurance with Nagico Insurance Company Limited (‘Nagico’) which insurance was negotiated through the Defendant as broker and/or agent for Nagico (‘the Policy’).
The insurance was a fire and allied perils insurance policy covering two properties on Providenciales, Turks and Caicos Islands (‘TCI’). The annual premium was US$25,800.00 plus government tax of $645.00 and a policy fee of US$100.00 (total US$26,545.00). On 16 August 2017, the Defendant issued a cover note (or binder) which stated: “In accordance with your instructions we have effected the undermentioned insurance.”
It went on to describe the “Insured Perils” as being: “Fire. Lightning. Hurricane. Cyclone, Tornado or Windstorm. Earthquake or Volcanic Eruption. Riot, Strike and Malicious Damage. Explosion. Flood. Impact involving an Aircraft aerial device or debris, Falling trees or branches, vehicle or animal. Burst Water Pipes.”
The premium was fully paid on or about 21 August 2017. In September 2017 the TCI were hit by 2 hurricanes, Irma and Maria, the former causing extensive property damage in Providenciales, including damage to the insured properties.
The claim in the re-amended statement of claim that came before the Court for trial was:
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- Damages, to cover the losses set out in the contractor's estimates as provided to the insurer in October 2017, US$103,020.00 for repairs to the Quality Grocers Building, and US$132,463.00 for repairs to the Leeward Highway property.
- The increase in the cost of those repairs, from 2017 to 2021.
- US$48,083.69 in interest from 1st January 2018 to 20 June 2021 on the 2017 estimates.
- Interest pursuant to section 19(2) of the Civil Procedure Ordinance Cap 4.01.
- Interest pursuant to section 20(1) of the Civil Procedure Ordinance Cap 4.01.
- Costs of and occasion by, and or incidental to, these proceedings.
- Any other relief as may seem fair and just to this Honourable Court.
The Plaintiff asserts that at all material times the Defendant was acting as an insurance broker and as such owed certain duties of care to the Plaintiff and further asserts that the Defendant: “…would use its skill and experience to ensure that the plaintiff was provided with a policy which indemnifies the plaintiff from loss and damage caused by either of the risks insured under the policy, and that the plaintiff was able to receive the full benefit of the insurance policy.”
In breach of this alleged duty the Plaintiff pleads: “The insurer has refused to settle the claims, citing irregularities in the procedure adopted by the defendant in placing the insurance cover for the plaintiff.” The Plaintiff also claims that the Defendant was negligent in the way it placed the insurance with Nagico
Held: The claim is dismissed. The Defendant shall pay to the Plaintiff the sum of US$26,545.00 being the premium paid by the Plaintiff. The Plaintiff shall pay the Defendant’s costs to be taxed on the standard basis if not agreed.
In order to answer the question as to what capacity the Defendant was acting, I have given consideration to the facts and to what the Defendant actually did, which I have set out above. The unavoidable conclusion is that the Defendant was more likely than not acting in the capacity of an insurance broker when dealing with the Plaintiff. The consequence of that is that the Defendant owed a duty of care to the Plaintiff to obtain appropriate insurance coverage.
As to the negligence claim, in order to succeed in this claim, the burden is on the Plaintiff to prove the following: a. That the Defendant owed a duty of care to the Plaintiff; b. That the Defendant acted without reasonable skill and care in breach of the duty of care; and c. That as a result of the acts or omissions the Plaintiff suffered loss. These proceedings face an insurmountable problem that in order to succeed against the Defendant, the Plaintiff not only has to prove that the matters relied on were such that they breached the duty of reasonable skill and care, but also that Nagico was entitled to avoid the policy as a result. On the evidence provided I cannot be sure that it is more likely than not that the matters complained about would have allowed Nagico to avoid the contract without that being tested. They are not so obvious like, for example, if the Defendant had failed to pay the premium.
I make a final observation that appears to have been overlooked with respect to the premium paid. There is no dispute that the premium was paid in full by 21 August 2017. Mr Hamilton says that the Defendant deposited this premium into Nagico’s account with Scotiabank, less its commission, on 3rd October 2017. Mr Hamilton further states that in August 2019, shortly after they had been joined into these proceedings, Nagico sent the Defendant a cheque in the full amount of the premium (presumably less the commission) which he has kept in the Defendant’s safe as the matter was being litigated. The Plaintiff is entitled to be reimbursed the premium in full and I so order.